<SUBMISSION>
<ACCESSION-NUMBER>0001004980-04-000285
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20041215
<ITEMS>1.01
<ITEMS>2.03
<ITEMS>5.02
<ITEMS>5.03
<ITEMS>8.01
<ITEMS>9.01
<FILING-DATE>20041216
<DATE-OF-FILING-DATE-CHANGE>20041215
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PG&E CORP
<CIK>0001004980
<ASSIGNED-SIC>4931
<IRS-NUMBER>943234914
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-12609
<FILM-NUMBER>041206302
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE MARKET SPEAR TOWER
<STREET2>SUITE 2400
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
<PHONE>4152677000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE MARKET SPEAR TOWER
<STREET2>SUITE 2400
<CITY>SAN FRANCISCO
<STATE>CA
<ZIP>94105
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>PG&E PARENT CO INC
<DATE-CHANGED>19951214
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>final121504.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<html>
<head>
<title>Form 8-K</title>
</head>
<body link="blue" vlink="purple">
<div>
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td colspan="5" valign="top">
<p align="center"><b>UNITED STATES</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>SECURITIES AND EXCHANGE COMMISSION</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>Washington, D.C.&nbsp; 20549</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>FORM 8-K</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>CURRENT REPORT</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>Date of Report: December 15, 2004</b></p>

<p align="center">
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>PG&amp;E CORPORATION</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Exact Name of Registrant as specified in
Charter)</b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><u>California</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>1-2609</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>94-323914</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">(State or other jurisdiction of
incorporation)</p>
</td>
<td colspan="2" valign="top">
<p align="center"><br />
 (Commission File Number)</p>
</td>
<td colspan="2" valign="top">
<p align="center">(IRS Employer<br />
 Identification No.)</p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center"><b><u>One Market, Spear Tower, Suite 2400, San
Francisco, CA</u></b></p>
</td>
<td colspan="3" valign="top">
<p align="center"><b><u>94105</u></b></p>
</td>
</tr>

<tr>
<td colspan="2" valign="top">
<p align="center">(Address of principal executive offices)</p>
</td>
<td colspan="3" valign="top">
<p align="center">(Zip code)</p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>415-267-7000</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Registrant&rsquo;s Telephone Number,
Including Area Code)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>N/A</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Former Name or Former Address, if Changed
Since Last Report)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>PACIFIC GAS AND ELECTRIC COMPANY</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Exact Name of Registrant as specified in
Charter)</b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center"><b><u>California</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>1-2348</u></b></p>
</td>
<td colspan="2" valign="top">
<p align="center"><b><u>94-0742640</u></b></p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">(State or other jurisdiction of
incorporation)</p>
</td>
<td colspan="2" valign="top">
<p align="center"><br />
 (Commission File Number)</p>
</td>
<td colspan="2" valign="top">
<p align="center">(IRS Employer<br />
 Identification No.)</p>
</td>
</tr>

<tr>
<td valign="top">
<p align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td colspan="2" valign="top"></td>
<td colspan="2" valign="top"></td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center"><b><u>77 Beale Street, P. O. Box 770000, San
Francisco, California</u></b></p>
</td>
<td valign="top">
<p align="center"><b><u>94177</u></b></p>
</td>
</tr>

<tr>
<td colspan="4" valign="top">
<p align="center">(Address of principal executive offices)</p>
</td>
<td valign="top">
<p align="center">(Zip code)</p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>(415) 973-7000</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Registrant&rsquo;s Telephone Number,
Including Area Code)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b><u>N/A</u></b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top">
<p align="center"><b>(Former Name or Former Address, if Changed
Since Last Report)</b></p>
</td>
</tr>

<tr>
<td colspan="5" valign="top"></td>
</tr>

<tr>
<td colspan="5" valign="top">
<p><br />
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):</p>
</td>
</tr>
</table>

<table border="0" cellspacing="0" cellpadding="0" width="624">
<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)</p>
</td>
</tr>

<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Soliciting Material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)</p>
</td>
</tr>

<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act<br />
 (17 CFR 240.14d-2(b)</p>
</td>
</tr>

<tr>
<td valign="top">
<p>[&nbsp;]</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act<br />
 (17 CFR 240.13e-4(c))</p>
</td>
</tr>
</table>

<p><b></b></p>

<div align="center">
<hr size="2" width="624" align="center" />
</div>

<p><b>&nbsp;Item 1.01 &ndash; Entry Into a Material Definitive
Agreement</b></p>

<p>
A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
PG&amp;E Corporation Credit Agreement</p>

<p></p>

<p>On December 10, 2004, PG&amp;E Corporation entered into a
three-year unsecured credit agreement for a $200 million revolving
credit facility with BNP Paribas (BNP), as administrative agent and
a lender, Deutsche Bank Securities, as syndication agent, ABN Amro
Bank, N.V., Goldman Sachs Credit Partners L.P., and Union Bank of
California, N.A., as documentation agents and lenders, and the
following other lenders: Barclays Bank PLC, Citicorp USA, Inc.,
Deutsche Bank AG New York Branch, JP Morgan Chase Bank, N.A.,
Lehman Brothers Bank, FSB, Morgan Stanley Bank, Royal Bank of
Canada, The Bank of Nova Scotia, and The Bank of New York&nbsp; The
credit facility will be used for working capital purposes.&nbsp;
PG&amp;E Corporation has not made any borrowings or issued any
letters of credit under the credit facility as of the date of this
filing.&nbsp;</p>

<p></p>

<p>The credit facility has a term of three years and all amounts
will be due and payable on December 10, 2007.&nbsp; Subject to
obtaining commitments from existing or new lenders and satisfying
other conditions specified in the credit agreement, PG&amp;E
Corporation may increase the credit facility to $300 million.&nbsp;
In addition, at PG&amp;E Corporation&rsquo;s request and at the
sole discretion of each lender, the credit facility may be extended
for additional periods.&nbsp;</p>

<p></p>

<p>Borrowings under the credit facility will bear interest based,
at PG&amp;E Corporation&rsquo;s election, on a Eurodollar rate or
the base rate plus an applicable margin.&nbsp; The base rate will
equal the higher of BNP&rsquo;s announced base rate or 0.5% above
the federal funds rate.&nbsp; PG&amp;E Corporation also will pay a
facility fee on the total commitments of the lenders under the
credit facility and a utilization fee on the average amount of
extensions of credit under the credit facility during any quarter
in excess of 50% of the total commitments.&nbsp; Until the earlier
to occur of December 10, 2005, or a downgrade of the issuer ratings
of Pacific Gas and Electric Company (Utility) by Standard &amp;
Poor&rsquo;s or Moody&rsquo;s Investors Service (Moody&rsquo;s),
the applicable margin for Eurodollar loans is fixed at 0.70% and 0%
for base rate loans, the facility fee is fixed at 0.175% and the
utilization fee is fixed at 0.125%.&nbsp; Thereafter, the
applicable margins, facility fee and utilization fee will be based
on the Utility&rsquo;s issuer rating.&nbsp; The applicable margins
will range between 0.70% and 1.35% for Eurodollar loans and 0% and
0.5% for base rate loans.&nbsp; The facility fee will range between
0.175% and 0.4% and the utilization fee will range between 0.125%
and 0.25%.&nbsp; In addition, PG&amp;E Corporation will pay a fee
for each letter of credit issued under the credit facility equal to
the applicable margin for Eurodollar loans and a customary fee
payable to BNP as the letter of credit issuer.</p>

<p></p>

<p>The credit agreement includes usual and customary covenants for
credit facilities of this type, including covenants limiting the
following: liens, mergers, substantial asset sales and other
fundamental changes, debt, and sales of the Utility&rsquo;s stock
owned by PG&amp;E Corporation.&nbsp; The credit agreement also
requires that PG&amp;E Corporation maintain a ratio of total
consolidated debt to total consolidated capitalization of not more
than 0.65 to 1.00 as of the end of each fiscal quarter.&nbsp; The
limitations on debt include a maximum of $1.5 billion of debt
incurred or guaranteed by PG&amp;E Corporation prior to the
resumption of regular quarterly dividends by the Utility.&nbsp; In
addition, at any time, the credit facility limits debt secured by
the Utility&rsquo;s stock owned by PG&amp;E Corporation to $2
billion, provided that the lenders have an equal and ratable lien
on such stock.</p>

<p></p>

<p>In the event of a default by PG&amp;E Corporation under the
credit agreement, including cross-defaults relating to specified
other debt of PG&amp;E Corporation or the Utility in excess of $75
million, the lenders may terminate the commitments under the credit
agreement and declare the amounts outstanding, including all
accrued interest and unpaid fees, payable immediately.&nbsp; In
addition, the lenders may enforce any and all rights and remedies
created under the credit facility or applicable law, including
set-off rights.&nbsp; For events of default relating to insolvency,
bankruptcy or receivership, the commitments are automatically
terminated and the amounts outstanding become payable
immediately.</p>

<p></p>

<p>The lenders and agents under the credit facility and their
affiliates have in the past provided, and may in the future
provide, investment banking, underwriting, lending, commercial
banking and other advisory services to PG&amp;E Corporation and the
Utility.&nbsp; These parties have received, and may in the future
receive, customary compensation from PG&amp;E Corporation and the
Utility for such services.</p>

<p></p>

<p>A copy of the credit agreement is attached as Exhibit 99 and is
incorporated herein by reference.&nbsp; The foregoing summary of
the terms of the credit agreement does not purport to be complete
and is qualified in its entirety by reference to the credit
agreement.</p>

<p></p>

<p>PG&amp;E Corporation&rsquo;s target is to establish $300 million
of liquidity through a combination of $100 million in cash and the
$200 million revolving credit facility discussed above.&nbsp; As of
December 13, 2004, when PG&amp;E Corporation terminated its open
market stock purchase program, PG&amp;E Corporation had used
approximately $32 million of the previously announced $350 million
authorization to repurchase shares.&nbsp; As discussed below,
PG&amp;E Corporation will use the remaining approximately $318
million to repurchase shares of its common stock on an accelerated
basis.</p>

<p></p>

<p>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accelerated Share
Repurchase</p>

<p></p>

<p>On December 15, 2004, PG&amp;E Corporation entered into
accelerated share repurchase arrangements with Goldman, Sachs &amp;
Co. (GS&amp;Co.) under which PG&amp;E Corporation will repurchase
9,769,600 shares of its outstanding common stock at an initial
price of $32.50 per share.&nbsp; The repurchase will be funded from
available cash on hand.&nbsp; The repurchased shares will be
retired.&nbsp; Under the terms of the arrangements, PG&amp;E
Corporation may receive from, or be required to pay, GS&amp;Co. a
price adjustment based on the daily volume weighted average market
price of PG&amp;E Corporation common stock over a period of
approximately two months.&nbsp; The price adjustment can be
settled, at PG&amp;E Corporation&rsquo;s option, in cash or in
shares of its common stock.</p>

<p></p>

<p>GS&amp;Co. may terminate the transaction (i) in the event of a
default by PG&amp;E Corporation under the accelerated share
repurchase arrangements (which would include the acceleration of
certain other PG&amp;E Corporation indebtedness in a principal
amount in excess of $75 million), (ii) on the day before any
ex-dividend date of a PG&amp;E Corporation dividend, and (iii) in
certain other circumstances.&nbsp; In the event of termination in
connection with the ex-dividend date, PG&amp;E Corporation and
GS&amp;Co. may elect to enter into a new agreement to complete the
original transaction.&nbsp; Upon an early termination (other than
when a new agreement is executed to complete the original
transaction), PG&amp;E Corporation would be required to compensate
GS&amp;Co. for losses it incurred in connection with the
accelerated share repurchase transaction.</p>

<p></p>

<p>The repurchase will not have a material impact on the
calculation of earnings per share for 2004 since the calculation is
based on the weighted average number of shares outstanding during
2004.&nbsp; Any shares that PG&amp;E Corporation issues in the
future in connection with an early termination of the transaction
or to compensate GS&amp;Co. for any price adjustment would increase
the number of shares outstanding at the time of issuance.&nbsp; In
addition, until the transaction is completed or terminated,
generally accepted accounting principles require PG&amp;E
Corporation to assume that it will issue shares to settle any
obligation it may have at the end of a quarterly or year end
reporting period to GS&amp;Co. in relation to any increase in share
price over the share price at inception of the transaction, along
with other net costs with respect to the repurchased shares.&nbsp;
The amount of shares PG&amp;E Corporation must treat as having been
issued to settle such obligation would be included in the weighted
average number of shares outstanding for purposes of calculating
PG&amp;E Corporation&rsquo;s fully diluted earnings per share for
that reporting period.</p>

<p></p>

<p>GS&amp;Co. and certain of its affiliates have engaged, and may
in the future engage, in financial advisory, investment banking and
other services for PG&amp;E Corporation and its affiliates,
including acting as a lender under PG&amp;E Corporation&rsquo;s
credit agreement discussed above.</p>

<p><b>Item 2.03 &ndash; Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant</b></p>

<p>The information set forth above in Item 1.01 regarding PG&amp;E
Corporation&rsquo;s entry into a $200 million three-year revolving
credit agreement dated as of December 10, 2004, is hereby
incorporated into Item 2.03(a) by reference.</p>

<p></p>

<p>The information set forth above in Item 1.01 regarding PG&amp;E
Corporation&rsquo;s undertaking of an accelerated share repurchase
is hereby incorporated into Item 2.03(b) by reference.</p>

<p></p>

<p><b>Item 5.02 &ndash; Departure of Directors or Principal
Officers; Election of Directors; Appointment of Principal
Officers</b></p>

<p>On December 15, 2004, the Board of Directors of PG&amp;E
Corporation appointed Peter A. Darbee, 51, as President and Chief
Executive Officer of PG&amp;E Corporation to be effective January
1, 2005.&nbsp; Mr. Darbee currently serves as Senior Vice President
and Chief Financial Officer of PG&amp;E Corporation, a position he
has held since September 20, 1999.&nbsp; From September 20, 1999 to
July 8, 2001, he also served as Treasurer.</p>

<p></p>

<p>Mr. Darbee would succeed Robert D. Glynn, Jr. who will retire as
Chief Executive Officer and President effective January 1,
2005.&nbsp; Mr. Glynn will remain Chairman of the Board of
Directors of both PG&amp;E Corporation and the Utility.&nbsp; He
has informed PG&amp;E Corporation and the Utility that he intends
to resign as Chairman of the Board and as a director and employee
effective January 1, 2006.&nbsp;</p>

<p></p>

<p>The Board of Directors of PG&amp;E Corporation also has
appointed Christopher P. Johns, 44, who has been serving as Senior
Vice President and Controller of PG&amp;E Corporation since
September 19, 2001, as Senior Vice President,&nbsp; Chief Financial
Officer, and Controller of PG&amp;E Corporation effective January
1, 2005.&nbsp; Mr. Johns served as Vice President and Controller of
PG&amp;E Corporation from July 1, 1997 to September 18, 2001.&nbsp;
He also served as Vice President and Controller of the Utility from
June 1, 1996 to December 31, 1999.&nbsp;</p>

<p></p>

<p>On December 15, 2004, the Board of Directors of PG&amp;E
Corporation also adopted resolutions to amend the PG&amp;E
Corporation bylaws to change the authorized number of directors
from eight to ten, effective January 1, 2005.&nbsp; Under PG&amp;E
Corporation's bylaws, the authorized number of directors may not be
less than 7 nor more than 13, but within that range the Board of
Directors may set the exact number of directors by an amendment to
the bylaws.&nbsp; On December 15, 2004, the Board of Directors of
the Utility also adopted resolutions to amend the Utility bylaws to
change the authorized number of directors from nine to eleven,
effective January 1, 2005.&nbsp; Under the Utility&rsquo;s bylaws,
the authorized number of directors may not be less than 9 nor more
than 17, but within that range the Board of Directors may set the
exact number of directors by an amendment to the bylaws.&nbsp;</p>

<p></p>

<p>When the bylaw amendments become effective on January 1, 2005,
there will be two vacancies on each Board of Directors.&nbsp;
Accordingly, on December 15, 2004, the Boards of Directors of each
of PG&amp;E Corporation and the Utility elected Mr. Darbee and Ms.
Barbara L. Rambo to serve as directors effective January 1, 2005 to
fill these vacancies.&nbsp; The PG&amp;E Corporation Board of
Directors named Mr. Darbee as a member of the Executive Committee
and named Ms. Rambo as a member of the Nominating, Compensation,
and Governance Committee and the Finance Committee. The Utility
Board of Directors named Mr. Darbee as a member of the Executive
Committee of that Board.&nbsp; These committee appointments also
will become effective January 1, 2005.</p>

<p></p>

<p>Under PG&amp;E Corporation&rsquo;s and the Utility&rsquo;s
Corporate Governance Guidelines, at least 75% of each Board is
required to be composed of independent directors, defined as
directors who (1) are neither current nor former officers or
employees of nor consultants to PG&amp;E Corporation or its
subsidiaries, (2) are neither current nor former officers or
employees of any other corporation on whose board of directors any
officer of PG&amp;E Corporation serves as a member, and (3)
otherwise meet the applicable definition of
&ldquo;independence&rdquo; set forth in the New York Stock
Exchange, American Stock Exchange, and Pacific Exchange
rules.&nbsp; The Utility&rsquo;s Board of Directors has temporarily
waived this guideline.&nbsp; Since Mr. Darbee would not be an
independent director, as defined in these corporate governance
guidelines, his appointment will reduce the percentage of
independent members on the Board of Directors of the Utility to
approximately 73% from approximately 78%.&nbsp; The Board of
Directors of both PG&amp;E Corporation and the Utility will
continue to comply with applicable stock exchange rules, which
require only that a majority of the Board of Directors be
independent.</p>

<p></p>

<p>There are no arrangements or understandings pursuant to which
Mr. Darbee or Ms. Rambo was selected as a director of PG&amp;E
Corporation or of the Utility.&nbsp; Neither Mr. Darbee, Mr. Johns,
nor Ms. Rambo has any relationship or related transaction with
PG&amp;E Corporation or the Utility that would require disclosure
pursuant to Item 404(a) of Securities and Exchange Commission
Regulation S-K.</p>

<p></p>

<p><b>Item 5.03 - Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year</b></p>

<pre>
</pre>

<p>The information set forth above in Item 5.02 regarding the
prospective amendment of the bylaws of PG&amp;E Corporation and the
Utility is hereby incorporated into Item 5.03 by reference.</p>

<p></p>

<p></p>

<p><b>Item 8.01 - Other Events</b></p>

<p>A.&nbsp; Credit Ratings Review</p>

<p>On December 13, 2004, Moody's announced that it had placed the
ratings of the Utility under review for possible upgrade,
reflecting a number of positive regulatory developments that have
occurred since the Utility emerged from bankruptcy in April 2004,
which Moody&rsquo;s states collectively strengthen the Utility's
prospects for improving credit quality.&nbsp; Moody&rsquo;s noted
that its rating review will focus on the Utility's ability to
complete the upcoming securitization financing through the issuance
of energy recovery bonds, as well as the outcome of a number of
important state regulatory decisions involving long-term resource
planning, cost of capital, and the Utility&rsquo;s gas business,
all of which are scheduled to be rendered during December 2004 by
the California Public Utilities Commission (CPUC).&nbsp; In
addition to the Utility&rsquo;s issuer rating (currently rated
Baa3), Moody&rsquo;s stated the ratings under review for possible
upgrade include: the Utility&rsquo;s first mortgage bonds, secured
pollution control bonds, and secured bank loan agreement (currently
rated Baa2); preferred stock (currently rated Ba2); and the
Utility&rsquo;s shelf registration for the issuance of first
mortgage bonds and senior unsecured debt (currently rated (P)Baa2
and (P)Baa3, respectively).</p>

<p>B. Notice of Redemption of Utility&rsquo;s Floating Rate First
Mortgage Bonds</p>

<p></p>

<p>On December 1, 2004, pursuant to the Utility&rsquo;s
instruction, the trustee under the indenture for the
Utility&rsquo;s Floating Rate First Mortgage Bonds due 2006
provided notice that $300 million aggregate principal amount of
Floating Rate First Mortgage Bonds would be redeemed on January 3,
2005.&nbsp; The bonds to be redeemed will be selected from all
Floating Rate First Mortgage Bonds due 2006 in accordance with the
procedures of The Depository Trust Company.&nbsp; The Utility has
drawn $300 million under its $850 million credit agreement to pay
for the redemption.</p>

<p></p>

<p>C. Approval of Diablo Canyon Spent Fuel Storage Facility</p>

<p></p>

<p>On December 8, 2004, the California Coastal Commission
(Commission) granted the Utility&rsquo;s application for a coastal
development permit authorizing it to proceed with its planned
construction of an on-site dry cask storage facility for spent
nuclear fuel at the Utility&rsquo;s Diablo Canyon nuclear power
plant (Diablo Canyon).&nbsp; As previously disclosed, in April
2004, San Luis Obispo County (County) issued a permit under the
California Coastal Act, subject to a number of conditions.&nbsp;
The Utility, along with several other interested parties, filed
appeals of the County&rsquo;s decision with the Commission.&nbsp;
The Utility&rsquo;s appeal challenged one of the conditions
pertaining to the granting of public access to the coast and other
portions of the Utility&rsquo;s property surrounding Diablo
Canyon.&nbsp; The Commission granted the Utility's appeal, denied
the appeals of other parties and conducted a de novo review of the
application. &nbsp; The Commission&rsquo;s December 8, 2004
decision requires that the Utility provide expanded public access
to the coast and other lands surrounding Diablo Canyon, although
such public access is less expansive than the County had originally
required and will be subject to a one-year study process.</p>

<p>Further, as previously disclosed, several intervenors have filed
an appeal of the Nuclear Regulatory Commission&rsquo;s (NRC) March
2004 decision authorizing the dry cask storage facility in the U.S.
Court of Appeals for the Ninth Circuit.&nbsp; Oral arguments on
that appeal are expected in the first quarter of 2005 with a
decision anticipated in mid-2005.&nbsp; PG&amp;E Corporation and
the Utility cannot predict the outcome of these appeals.&nbsp;</p>

<p>The Utility anticipates that the new dry cask storage facility
will enable it to store on-site all of the spent fuel produced by
Diablo Canyon&rsquo;s Unit 1 and Unit 2 through expiration of their
operating licenses in 2021 and 2024, respectively.&nbsp; Barring
the issuance of a judicial stay of the NRC or Commission approvals,
the Utility may proceed with construction of the dry cask storage
facility.</p>

<p>As previously disclosed, on November 3, 2004, the Utility filed
an application with the NRC seeking authorization to install a
temporary rack in its existing spent fuel storage pool which would
increase the on-site storage capability to permit the Utility to
operate Unit 1 until 2010 and Unit 2 until 2011.&nbsp; This option
will remain available if construction of the dry cask storage
facility is delayed.&nbsp; If the on-site dry cask storage facility
is not completed, and the Utility is otherwise unable to increase
its on-site storage capacity, it is possible that the operation of
Diablo Canyon may have to be curtailed or halted as early as 2007
and until such time as additional spent fuel can be safely
stored.</p>

<p>D.&nbsp; Revised Draft ResolutionRegarding Billing
Issues&nbsp;</p>

<p></p>

<p>On December 9, 2004, the Energy Division of the CPUC released a
revised draft resolution regarding delayed and estimated bills for
comment.&nbsp; Unlike the earlier draft released on November 16,
2004, the revised draft, if adopted by the CPUC, would provide a
regulatory hearing process in which the CPUC can determine whether
the Utility should be ordered to make refunds on, or adjustments
to, previously rendered bills, as well as any other issues
specified by the assigned Commissioner and the administrative law
judge.&nbsp; The revised resolution proposes to grant the motion
filed by The Utility Reform Network (TURN) requesting that the CPUC
open an investigative proceeding to review the Utility&rsquo;s past
billing practices.&nbsp; The revised draft would require the
Utility to file a report in that proceeding explaining the reasons
for the amount of delayed and estimated bills for the five-year
period ended December 31, 2004, and describing a plan for reducing
the number of these bills.&nbsp;&nbsp;</p>

<p>The revised draft resolution declares that the tariff changes
included in the revised resolution, which exceed the
Utility&rsquo;s proposed tariff changes, are &ldquo;consistent with
existing CPUC policy, tariffs, and requirements&rdquo; and
&ldquo;simply reflect the proper interpretation of existing
tariffs.&rdquo;&nbsp; The revised draft resolution could affect the
Utility&rsquo;s past bills issued to customers before October 13,
2004, even though the Utility&rsquo;s proposed tariff changes only
would apply prospectively from the proposed October 13, 2004
effective date.</p>

<p>PG&amp;E Corporation and the Utility continue to believe that
the revised draft resolution, if adopted as an order by the CPUC,
would be unlawful to the extent it (i) is applied retroactively to
bills issued before October 13, 2004, (ii) requires the Utility to
make tariff modifications beyond those it requested in its October
15, 2004 advice letter, and (iii) grants TURN&rsquo;s motion.&nbsp;
Comments on the revised draft resolution are due December 30, 2004
with reply comments due January 6, 2005.&nbsp; Neither PG&amp;E
Corporation nor the Utility can predict the outcome of this
matter.&nbsp; It is possible that the outcome would have a material
adverse effect on PG&amp;E Corporation&rsquo;s or the
Utility&rsquo;s results of operations or financial condition.</p>

<p>E.&nbsp; Authorized Share Repurchases</p>

<p></p>

<p>On December 15, 2004, the Board of Directors of PG&amp;E
Corporation authorized the purchase of shares of PG&amp;E
Corporation common stock directly, or through one or more
subsidiaries, from time to time, but no later than June 30, 2006,
through brokers and dealers on the New York Stock Exchange and/or
the Pacific Exchange or in privately negotiated transactions, which
may include accelerated or forward or similar stock purchases
and/or the establishment of one or more &ldquo;Rule 10b5-1
plans&rdquo; with an aggregate purchase price not to exceed $975
million (excluding brokers&rsquo; commissions and any gains or
losses incurred in connection with hedging the risk associated with
changes in the market price of PG&amp;E Corporation&rsquo;s common
stock or the settlement of outstanding liabilities with respect to
repurchased shares in connection with any accelerated share
repurchase program or forward or similar stock purchase
program).&nbsp; Such repurchases are contingent on PG&amp;E
Corporation&rsquo;s receipt of sufficient cash from the
Utility.</p>

<p></p>

<p>On December 15, 2004, the Board of Directors of the Utility
authorizedthe repurchase of up to $800 million of the
Utility&rsquo;s common stock from PG&amp;E Corporation, with such
repurchases to be effected from time to time, but no later than
December 31, 2006.&nbsp; The aggregate authorized amount of stock
repurchases will increase to $1.8 billion following the receipt of
proceeds from the issuance of the first series of Energy Recovery
Bonds (ERBs) expected to be issued in January 2005 to refinance the
regulatory asset provided under the settlement agreement entered
into by PG&amp;E Corporation, the Utility, and the CPUC to resolve
the Utility&rsquo;s Chapter 11 proceeding (Settlement
Agreement).&nbsp; The actual amounts of the stock repurchases will
depend upon the actual proceeds received from the ERBs, as well as
the Utility&rsquo;s cash from operations, capital requirements, and
projected capital structure.&nbsp;</p>

<p><b></b></p>

<p><b></b></p>

<p><b>Item 9.01:&nbsp; Financial Statements and Exhibits</b></p>

<p><b></b></p>

<p>(c)&nbsp; Exhibits</p>

<p></p>

<p>
99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Credit Agreement, dated as of December 10, 2004, among PG&amp;E
Corporation, BNP Paribas, as administrative agent and a lender,
Deutsche Bank Securities, as syndication agent, ABN Amro Bank,
N.V., Goldman Sachs Credit Partners L.P., and Union Bank of
California, N.A., as documentation agents and lenders, and the
following other lenders: Barclays Bank PLC, Citicorp USA, Inc.,
Deutsche Bank AG New York Branch, JP Morgan Chase Bank, N.A.,
Lehman Brothers Bank, FSB, Morgan Stanley Bank, Royal Bank of
Canada, The Bank of Nova Scotia, and The Bank of New York</p>

<p></p>

<br clear="all" />


<table border="0" cellspacing="0" cellpadding="0" width="624">
<tr>
<td valign="top">
<p align="center">SIGNATURE</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
</tr>

<tr>
<td valign="top">
<p>Pursuant to the requirements of the Securities Exchange Act of
1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned thereunto duly authorized.</p>

<p>&nbsp;</p>
</td>
</tr>
</table>

<p></p>

<p></p>

<table border="0" cellspacing="0" cellpadding="0" width="624">
<tr>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>PG&amp;E CORPORATION</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;/s/ CHRISTOPHER P. JOHNS</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;</p>
</td>
<td valign="top">
<div></div>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Christopher P. Johns<br />
 Senior Vice President and Controller</p>
</td>
</tr>

<tr>
<td valign="top"></td>
<td colspan="2" valign="top">
<p>PACIFIC GAS AND ELECTRIC COMPANY</p>
</td>
</tr>

<tr>
<td valign="top">
<p>&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>&nbsp;&nbsp;&nbsp;&nbsp;/s/ DINYAR B. MISTRY</p>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top">
<p>By:&nbsp;&nbsp;</p>
</td>
<td valign="top">
<div></div>
</td>
</tr>

<tr>
<td valign="top">
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td valign="top"></td>
<td valign="top">
<p>Dinyar B. Mistry<br />
 Vice President and Controller</p>
</td>
</tr>
</table>

<p>Dated:&nbsp; December 15, 2004</p>

<br clear="all" />


<p align="center">EXHIBIT INDEX</p>

<p>99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit Agreement, dated as of
December 10, 2004, among PG&amp;E Corporation, BNP Paribas, as
administrative agent and a lender, Deutsche Bank Securities, as
syndication agent, ABN Amro Bank, N.V., Goldman Sachs Credit
Partners L.P., and Union Bank of California, N.A., as documentation
agents and lenders, and the following other lenders: Barclays Bank
PLC, Citicorp USA, Inc., Deutsche Bank AG New York Branch, JP
Morgan Chase Bank, N.A., Lehman Brothers Bank, FSB, Morgan Stanley
Bank, Royal Bank of Canada, The Bank of Nova Scotia, and The Bank
of New York</p>
</div>
</body>
</html>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>creditagreementmerrill.htm
<DESCRIPTION>CREDIT AGREEMENT
<TEXT>
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<HTML><HEAD><TITLE></TITLE>
<BODY vLink=purple link=blue bgColor=#ffffff>
<P align=right><FONT size=2><B>Exhibit 99 </B></FONT></P>
<P align=right><FONT size=2><B>Execution Version </B></FONT></P>
<HR noShade>

<P align=center><FONT size=2>$200,000,000 </FONT></P>
<P align=center><FONT size=2>CREDIT AGREEMENT </FONT></P>
<P align=center><FONT size=2>among </FONT></P>
<P align=center><FONT size=2>PG&amp;E CORPORATION,<BR>as Borrower, </FONT></P>
<P align=center><FONT size=2>The Several Lenders from Time to Time Parties
Hereto, </FONT></P>
<P align=center><FONT size=2>BNP PARIBAS,<BR>as Administrative Agent,
</FONT></P>
<P align=center><FONT size=2>DEUTSCHE BANK SECURITIES&nbsp;INC.,<BR>as
Syndication Agent, </FONT></P>
<P align=center><FONT size=2>and </FONT></P>
<P align=center><FONT size=2>ABN AMRO BANK N.V., </FONT></P>
<P align=center><FONT size=2>GOLDMAN SACHS CREDIT PARTNERS L.P., </FONT></P>
<P align=center><FONT size=2>and UNION BANK OF CALIFORNIA, N.A.,<BR>as
Documentation Agents </FONT></P>
<P align=center><FONT size=2>Dated as of December&nbsp;10, 2004 </FONT></P>
<HR noShade>

<P align=center><FONT size=2>BNP PARIBAS<BR>and<BR>DEUTSCHE BANK
SECURITIES&nbsp;INC.,<BR>as Joint Lead Arrangers and<BR>Joint Bookrunners
</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=1,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=493001,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DA1542A.;1',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P align=center><FONT size=2><A name=page_dc1542_1_1></A></FONT><FONT
size=2><B>TABLE OF CONTENTS </B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="79%" border=0>
    <TR vAlign=bottom>
    <TH align=left colSpan=2><FONT size=2>&nbsp;</FONT><BR></TH>
    <TH width="3%"><FONT size=2>&nbsp;</FONT></TH>
    <TH align=left width="78%"><FONT size=2>&nbsp;</FONT><BR></TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="5%"><FONT size=1><B>Page</B></FONT>
      <HR noShade>
    </TH></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2>Section 1.</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>DEFINITIONS</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>1</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>1.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Defined Terms</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>1</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>1.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Other Definitional Provisions and
      Interpretive Provisions</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>13</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD colSpan=2><FONT size=2><BR>Section 2.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>AMOUNT AND TERMS OF COMMITMENTS</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>14</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Commitments</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>14</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Procedure for Revolving Loan
    Borrowing</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>14</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Commitment Increases</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>14</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Swingline Commitment</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>16</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Procedure for Swingline Borrowing; Refunding
      of Swingline Loans</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>16</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.6</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Facility Fees, Utilization Fees,
    etc.</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>17</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.7</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Termination or Reduction of Commitments;
      Extension of Termination Date</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>18</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.8</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Optional Prepayments</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>19</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.9</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Conversion and Continuation Options</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>20</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.10</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Limitations on Eurodollar Tranches</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>20</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.11</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Interest Rates and Payment Dates</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>20</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.12</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Computation of Interest and Fees</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>21</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.13</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Inability to Determine Interest
Rate</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>21</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.14</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Pro Rata Treatment and Payments;
    Notes</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>21</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.15</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Requirements of Law</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>23</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.16</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Taxes</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>24</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.17</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Indemnity</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>26</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.18</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Change of Lending Office</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>26</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>2.19</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Replacement of Lenders</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>26</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD colSpan=2><FONT size=2><BR>Section 3.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>LETTERS OF CREDIT</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>27</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>L/C Commitment</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>27</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Procedure for Issuance of Letters of
      Credit</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>27</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Fees and Other Charges</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>27</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>L/C Participations</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>28</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Reimbursement Obligation of the
      Borrower</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>29</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.6</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Obligations Absolute</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>29</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.7</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Letter of Credit Payments</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>30</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.8</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Applications</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>30</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.9</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Actions of Issuing Lenders</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>30</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.10</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Borrower's Indemnification</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>30</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>3.11</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Lenders' Indemnification</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>31</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD colSpan=2><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom width="5%"><FONT
size=2>&nbsp;</FONT></TD></TR></TABLE><!-- insert table folio --><BR>
<P align=center><FONT size=2>i</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=2,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=294240,FOLIO='i',FILE='DISK033:[04SFO2.04SFO1542]DC1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_dc1542_1_2></A><!-- end of table folio -->
<TABLE cellSpacing=0 cellPadding=0 width="79%" border=0>
    <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2><BR>Section 4.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>REPRESENTATIONS AND WARRANTIES</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>31</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Financial Condition</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>31</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>No Change</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>31</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Existence; Compliance with Law</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>31</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Power; Authorization; Enforceable
      Obligations</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>32</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>No Legal Bar</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>32</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.6</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Litigation</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>32</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.7</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>No Default</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>32</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.8</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Taxes</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>32</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.9</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Federal Regulations</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>33</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.10</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>ERISA</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>33</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.11</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Investment Company Act; Other
      Regulations</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>33</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.12</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Use of Proceeds</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>33</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.13</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Environmental Matters</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>33</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.14</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Accuracy of Information, etc.</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>34</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>4.15</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Regulatory Matters</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>35</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2><BR>Section 5.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>CONDITIONS PRECEDENT</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>35</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>5.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Conditions to the Closing Date</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>35</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>5.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Conditions to Each Extension of
    Credit</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>36</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD colSpan=2><FONT size=2><BR>Section 6.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>AFFIRMATIVE COVENANTS</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>36</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Financial Statements</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>36</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Certificates; Other Information</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>37</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Payment of Taxes</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>37</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Maintenance of Existence;
Compliance</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>37</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Maintenance of Property; Insurance</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>38</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.6</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Inspection of Property; Books and Records;
      Discussions</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>38</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.7</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Notices</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>38</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>6.8</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Maintenance of Licenses, etc.</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>39</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2><BR>Section 7.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>NEGATIVE COVENANTS</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>39</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>7.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Consolidated Capitalization Ratio</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>39</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>7.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Indebtedness</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>39</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>7.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Liens</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>39</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>7.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Fundamental Changes</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>40</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>7.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Ownership of PG&amp;E Utility Common
      Stock</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>40</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2><BR>Section 8.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>EVENTS OF DEFAULT</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>41</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD colSpan=2><FONT size=2><BR>Section 9.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>THE AGENTS</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>43</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Appointment</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>43</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Delegation of Duties</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>43</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Exculpatory Provisions</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>43</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Reliance by Administrative Agent</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>44</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Notice of Default</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>44</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.6</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Non-Reliance on Agents and Other
      Lenders</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>44</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.7</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Indemnification</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>45</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.8</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Agent in Its Individual Capacity</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>45</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.9</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Successor Administrative Agent</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>45</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>9.10</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Documentation Agents and Syndication
      Agent</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>45</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom width="5%"><FONT
size=2>&nbsp;</FONT></TD></TR></TABLE><!-- insert table folio -->
<P align=center><FONT size=2>ii</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=3,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=595951,FOLIO='ii',FILE='DISK033:[04SFO2.04SFO1542]DC1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_dc1542_1_3></A><!-- end of table folio -->
<TABLE cellSpacing=0 cellPadding=0 width="79%" border=0>
   <TR vAlign=top bgColor=#cceeff>
    <TD colSpan=2><FONT size=2><BR>Section 10.</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><BR>MISCELLANEOUS</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2><BR>46</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Amendments and Waivers</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>46</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Notices</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>47</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>No Waiver; Cumulative Remedies</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>48</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.4</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Survival of Representations and
      Warranties</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>48</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.5</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Payment of Expenses and Taxes</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>48</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.6</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Successors and Assigns; Participations and
      Assignments</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>49</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.7</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Adjustments; Set-off</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>51</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.8</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Counterparts</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>52</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.9</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Severability</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>52</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.10</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Integration</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>52</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.11</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><B>GOVERNING LAW</B></FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>52</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.12</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Submission To Jurisdiction; Waivers</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>52</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.13</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Acknowledgments</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>53</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.14</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>Confidentiality</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>53</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.15</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2><B>WAIVERS OF JURY TRIAL</B></FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT size=2>53</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="2%"><FONT size=0>&nbsp;</FONT></TD>
    <TD width="9%"><FONT size=2>10.16</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="78%"><FONT size=2>USA Patriot Act</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=bottom align=right width="5%"><FONT
  size=2>53</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<P align=center><FONT size=2>iii</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=4,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=729954,FOLIO='iii',FILE='DISK033:[04SFO2.04SFO1542]DC1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_dc1542_1_4></A>
<P><FONT size=2><I>SCHEDULES: </I></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>1.1A</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Commitments</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><BR><FONT size=2><I>EXHIBITS:</I></FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2><BR>A</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2><BR>Form of New Lender
Supplement</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>B</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Commitment Increase
    Supplement</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>C</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Compliance Certificate</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>D</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Closing Certificate</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>E</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Assignment and
Assumption</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>F-1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Legal Opinion of Orrick,
      Herrington&nbsp;&amp; Sutcliffe LLP</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>F-2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Legal Opinion of In-House Counsel of
      the Borrower</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>G</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Exemption Certificate</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="6%"><FONT size=2>H</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="91%"><FONT size=2>Form of Revolving
Note</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<P align=center><FONT size=2>iv</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=4,SEQ=5,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=809971,FOLIO='iv',FILE='DISK033:[04SFO2.04SFO1542]DC1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CREDIT AGREEMENT
(this "</FONT><FONT size=2><I>Agreement</I></FONT><FONT size=2>"), dated as of
December&nbsp;10, 2004, among PG&amp;E CORPORATION, a California corporation
(the "</FONT><FONT size=2><I>Borrower</I></FONT><FONT size=2>"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the "</FONT><FONT size=2><I>Lenders</I></FONT><FONT size=2>"),
BNP PARIBAS ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and DEUTSCHE
BANK SECURITIES&nbsp;INC. ("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT
size=2>"), as joint lead arrangers and joint bookrunners (together and in such
capacities, the "</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"),
Deutsche, as syndication agent (in such capacity, the "</FONT><FONT
size=2><I>Syndication Agent</I></FONT><FONT size=2>"), ABN AMRO BANK N.V.,
GOLDMAN SACHS CREDIT PARTNERS L.P. and UNION BANK OF CALIFORNIA, N.A., as
documentation agents (together and in such capacities, the "</FONT><FONT
size=2><I>Documentation Agents</I></FONT><FONT size=2>"), and BNP, as
administrative agent (in such capacity, together with any successor thereto, the
"</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT size=2>").
</FONT></P>
<P align=center><FONT size=2><B>W I T N E S S E T H: </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the
Borrower has requested the Lenders to make available to it the credit facilities
described herein; </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the
credit facilities made available hereunder consist of revolving credit loans and
a facility permitting the issuance, for the Borrower's account, of letters of
credit; and </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the
Lenders are willing to make available the credit facilities described herein
upon and subject to the terms and conditions set forth herein; </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW THEREFORE,
the parties hereto hereby agree as follows: </FONT></P>
<P align=center><FONT size=2><B>SECTION&nbsp;1. DEFINITIONS </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Defined Terms.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the terms listed in
this Section&nbsp;1.1 shall have the respective meanings set forth in this
Section&nbsp;1.1. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>ABR</I></FONT><FONT size=2>": for any day, a rate per annum (rounded
upwards, if necessary, to the next <SUP>1</SUP>/<SMALL>16</SMALL> of 1%) equal
to the greater of (a)&nbsp;the Base Rate in effect on such day and (b)&nbsp;the
Federal Funds Effective Rate in effect on such day </FONT><FONT
size=2><I>plus</I></FONT><FONT size=2> <SUP>1</SUP>/<SMALL>2</SMALL> of 1%. For
purposes hereof, "</FONT><FONT size=2><I>Base Rate</I></FONT><FONT size=2>"
shall mean the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its base rate in effect at its principal office
in New York City (the Base Rate not being intended to be the lowest rate of
interest charged by the Administrative Agent in connection with extensions of
credit to debtors). Any change in the ABR due to a change in the Base Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Base Rate or the Federal
Funds Effective Rate, respectively. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>ABR Loans</I></FONT><FONT size=2>": Loans the rate of interest
applicable to which is based upon the ABR. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Act</I></FONT><FONT size=2>": as defined in Section&nbsp;10.16.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Administrative Agent</I></FONT><FONT size=2>": as defined in the
preamble hereto. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Agents</I></FONT><FONT size=2>": the collective reference to the
Syndication Agent, the Documentation Agents and the Administrative Agent.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Agreement</I></FONT><FONT size=2>": as defined in the preamble hereto.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Applicable Margin</I></FONT><FONT size=2>": for any day, shall be
(a)&nbsp;prior to the Trigger Date, (i)&nbsp;0.70% for Eurodollar Loans and
(ii)&nbsp;0.00% for ABR Loans and (b)&nbsp;from and after the Trigger Date, the
applicable rate per annum set forth under the relevant column heading below,
based upon the Ratings then in effect: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="67%" border=0>
  <TR vAlign=bottom>
    <TH align=left width="8%"><FONT size=1><B>Level<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="48%"><FONT
      size=1><B>Rating<BR>S&amp;P/Moody's</B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="16%"><FONT size=1><B>Applicable Margin
      for<BR>Eurodollar Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="16%"><FONT size=1><B>Applicable Margin for<BR>ABR
      Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="2%"><FONT size=1>&nbsp;</FONT></TH></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="8%"><FONT size=2>1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><font face="SYMBOL">&gt;</font>&nbsp;BBB/Baa2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.70</FONT></TD>
    <TD width="3%"><FONT size=2>%</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.00</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="8%"><FONT size=2>2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2>BBB-/Baa3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="16%"><FONT size=2>1.05</FONT></TD>
    <TD width="3%"><FONT size=2>%</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.00</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="8%"><FONT size=2>3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2>&lt; BBB-/Baa3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="16%"><FONT size=2>1.35</FONT></TD>
    <TD width="3%"><FONT size=2>%</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.50</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=6,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=516556,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_2></A>
<P><FONT size=2>Subject to the provisions of this paragraph regarding split
ratings, from and after the Trigger Date, changes in the Applicable Margins
shall become effective on the date on which S&amp;P and/or Moody's changes its
relevant Rating. In the event the Ratings of S&amp;P and Moody's are in
different levels set forth in the grid above, the lower of the two Ratings
(</FONT><FONT size=2><I>i</I></FONT><FONT size=2>.</FONT><FONT
size=2><I>e</I></FONT><FONT size=2>., the Rating set forth in the grid above
opposite the higher numerical level number) shall govern. In the event that, at
any time, a Rating is not available from one of such rating agencies, the
Applicable Margins shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each such rating
agency are not available for companies generally, the Applicable Margins shall
be determined on the basis of the last Rating(s) made available. In the event
that, at any time, such Ratings are not available for PG&amp;E Utility but are
generally available for other companies, then the Applicable Margins shall be
those set forth above opposite level 3. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Application</I></FONT><FONT size=2>": an application, in such form as
the relevant Issuing Lender may reasonably specify from time to time, requesting
such Issuing Lender to issue a Letter of Credit. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Arrangers</I></FONT><FONT size=2>": as defined in the preamble hereto.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Assignee</I></FONT><FONT size=2>": as defined in Section&nbsp;10.6(b).
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Assignment and Assumption</I></FONT><FONT size=2>": an Assignment and
Assumption, substantially in the form of Exhibit&nbsp;E. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Available Commitment</I></FONT><FONT size=2>": as to any Lender at any
time, an amount equal to the excess, if any, of (a)&nbsp;such Lender's
Commitment then in effect </FONT><FONT size=2><I>over</I></FONT><FONT size=2>
(b)&nbsp;such Lender's Extensions of Credit then outstanding. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Beneficial Owner</I></FONT><FONT size=2>": as defined in
Rule&nbsp;13d-3 and Rule&nbsp;13d-5 under the Exchange Act, except that in
calculating the beneficial ownership of any particular "person" (as that term is
used in Sections 13(d) and 14(d) of the Exchange Act), such "person" will be
deemed to have beneficial ownership of all securities that such "person" has the
right to acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned"
have correlative meanings. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Benefitted Lender</I></FONT><FONT size=2>": as defined in
Section&nbsp;10.7(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Board</I></FONT><FONT size=2>": the Board of Governors of the Federal
Reserve System of the United States (or any successor). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>": as defined in the preamble hereto.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Borrower Ownership Subsidiary</I></FONT><FONT size=2>": any special
purpose Subsidiary of the Borrower, (a)&nbsp;all of the Capital Stock of which
is owned directly by the Borrower (or one or more wholly owned Subsidiaries of
the Borrower (other than PG&amp;E Utility and its Subsidiaries)) and
(b)&nbsp;the sole purpose of which is to own common stock of PG&amp;E Utility,
which owns no material asset other than such common stock and engages in no
material activities other than the ownership of such common stock and activities
directly related thereto. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Borrowing Date</I></FONT><FONT size=2>": any Business Day specified by
the Borrower as a date on which the Borrower requests the Lenders to make Loans
hereunder. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Business</I></FONT><FONT size=2>": as defined in Section&nbsp;4.13(b).
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Business Day</I></FONT><FONT size=2>": a day other than a Saturday,
Sunday or other day on which commercial banks in New York City or San Francisco,
California are authorized or required by law to close, </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that with respect to notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, such day is also a day for trading by and between banks in
Dollar deposits in the London interbank eurodollar market. </FONT></P>
<P align=center><FONT size=2>2</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=7,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=299929,FOLIO='2',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_3></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Capital Stock</I></FONT><FONT size=2>": any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants, rights or options to purchase any of
the foregoing. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Change of Control</I></FONT><FONT size=2>": (a)&nbsp;any person or
group (within the meaning of the Exchange Act and the rules of the SEC
thereunder as of the Closing Date) shall become the Beneficial Owner of shares
representing more than 30% of the voting power of the Borrower's Capital Stock,
or (b)&nbsp;occupation of a majority of the seats (other than vacant seats) on
the Borrower's board of directors (the "</FONT><FONT
size=2><I>Board</I></FONT><FONT size=2>") by persons who were neither nominated
by the Board nor appointed by directors so nominated by the Board, </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2> that no event described in clauses
(a)&nbsp;or (b)&nbsp;shall constitute a change of control if after giving effect
to such event the ratings by Moody's and S&amp;P of the Borrower's senior,
unsecured, non-credit enhanced debt shall be at least the higher of
(a)&nbsp;Baa3 from Moody's </FONT><FONT size=2><I>and</I></FONT><FONT size=2>
BBB- from S&amp;P and (b)&nbsp;the ratings by such rating agencies of such debt
in effect before the earlier of the occurrence or the public announcement of
such event. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2><I>Closing Date</I></FONT><FONT size=2>": the date on which the
conditions precedent set forth in Section&nbsp;5.1 shall have been satisfied,
which date is December&nbsp;10, 2004. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Code</I></FONT><FONT size=2>": the Internal Revenue Code of 1986, as
amended from time to time. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Commitment</I></FONT><FONT size=2>": as to any Lender, the obligation
of such Lender, if any, to make Revolving Loans and participate in Swingline
Loans and Letters of Credit in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Commitment" opposite such
Lender's name on </FONT><FONT size=2><I>Schedule&nbsp;1.1A</I></FONT><FONT
size=2> or in the Assignment and Assumption pursuant to which such Lender became
a party hereto, as the same may be changed from time to time pursuant to the
terms hereof. The original amount of the Total Commitment is $200,000,000.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Commitment Increase Notice</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.3(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Commitment Period</I></FONT><FONT size=2>": the period from and
including the Closing Date to the Termination Date. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Commonly Controlled Entity</I></FONT><FONT size=2>": an entity,
whether or not incorporated, that is under common control with the Borrower
within the meaning of Section&nbsp;4001 of ERISA or is part of a group that
includes the Borrower and that is treated as a single employer under
Section&nbsp;414 of the Code. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Compliance Certificate</I></FONT><FONT size=2>": a certificate duly
executed by a Responsible Officer substantially in the form of Exhibit&nbsp;B.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Conduit Lender</I></FONT><FONT size=2>": any special purpose
corporation organized and administered by any Lender for the purpose of making
Loans otherwise required to be made by such Lender and designated by such Lender
in a written instrument; </FONT><FONT size=2><I>provided</I></FONT><FONT
size=2>, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
size=2><I>further</I></FONT><FONT size=2>, that no Conduit Lender shall
(a)&nbsp;be entitled to receive any greater amount pursuant to
Section&nbsp;2.15, 2.16, 2.17 or 10.5 than the designating Lender would have
been entitled to receive in respect of the extensions of credit made by such
Conduit Lender or (b)&nbsp;be deemed to have any Commitment. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Confidential Information Memorandum</I></FONT><FONT size=2>": the
Confidential Information Memorandum dated November&nbsp;2004, and furnished to
certain Lenders in connection with the syndication of the Commitments.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Consolidated Capitalization</I></FONT><FONT size=2>": on any date of
determination, the sum of (a)&nbsp;Consolidated Total Debt on such date
</FONT><FONT size=2><I>plus</I></FONT><FONT size=2> (b)&nbsp;without
duplication, the amount set forth opposite the caption </FONT></P>
<P align=center><FONT size=2>3</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=8,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=657104,FOLIO='3',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_4></A><BR>
<P><FONT size=2>"shareholders' equity" (or any similar caption) on the
consolidated balance sheet, prepared in accordance with GAAP, of the Borrower
and its Subsidiaries as of such date. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Consolidated Capitalization Ratio</I></FONT><FONT size=2>" means, on
any date of determination, the ratio of (a)&nbsp;Consolidated Total Debt to
(b)&nbsp;Consolidated Capitalization. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Consolidated Total Debt</I></FONT><FONT size=2>": at any date, the
aggregate principal amount of all obligations of the Borrower and its
consolidated Subsidiaries at such date, that in accordance with GAAP would be
classified as debt on a consolidated balance sheet of the Borrower, and all
Guarantee Obligations of the Borrower and its consolidated Subsidiaries at such
date in respect of obligations of any other Person that in accordance with GAAP
would be classified as debt on a consolidated balance sheet of such Person;
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that, the determination
of "Consolidated Total Debt" shall exclude (a)&nbsp;any securitized bonds or
similar asset-backed securities that are non-recourse to the Borrower or any
consolidated Subsidiary, are issued by a special purpose subsidiary of the
Borrower or any consolidated Subsidiary and payable from a specific or dedicated
rate component (including the approximately $2,900,000,000 in rate reduction
certificates backed by transition property that were issued by a special purpose
trust on behalf of PG&amp;E Funding LLC in 1997 and the approximately
$3,000,000,000 in energy recovery bonds backed by recovery property that
PG&amp;E Energy Recovery Funding LLC expects to issue up to two series in early
2005 and early 2006) and (b)&nbsp;Indebtedness of the Borrower and its
consolidated Subsidiaries in an amount equal to the amount of cash held as cash
collateral for any fully cash collateralized letter of credit issued for the
account of the Borrower or any consolidated Subsidiary. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Continuing Lender</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.7. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Contractual Obligation</I></FONT><FONT size=2>": as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Default</I></FONT><FONT size=2>": any of the events specified in
Section&nbsp;8, whether or not any requirement for the giving of notice, the
lapse of time, or both, has been satisfied. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Disposition</I></FONT><FONT size=2>": with respect to any property,
any sale, lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof. The terms "</FONT><FONT size=2><I>Dispose</I></FONT><FONT
size=2>" and "</FONT><FONT size=2><I>Disposed of</I></FONT><FONT size=2>" shall
have correlative meanings. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Dividend Commencement Date</I></FONT><FONT size=2>": the first date
after which (a)&nbsp;the Borrower shall have publicly announced that it is
commencing to pay regular quarterly dividends on its common stock from dividends
paid by PG&amp;E Utility and (b)&nbsp;PG&amp;E Utility shall have paid such
dividends on at least one quarterly dividend payment date. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Documentation Agents</I></FONT><FONT size=2>": as defined in the
preamble hereto. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Dollars</I></FONT><FONT size=2>" and "</FONT><FONT
size=2><I>$</I></FONT><FONT size=2>": dollars in lawful currency of the United
States. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eligible Assignee</I></FONT><FONT size=2>": (a)&nbsp;any commercial
bank or other financial institution having a senior unsecured debt rating by
Moody's of A3 or better and by S&amp;P of A- or better, which is domiciled in a
country which is a member of the OECD or (b)&nbsp;with respect to any Person
referred to in the preceding clause&nbsp;(a), any other Person that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of business all of the Capital Stock of which
is owned, directly or indirectly, by such Person; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that, in the case of this
clause&nbsp;(b), the Issuing Lender and the Borrower shall have consented (such
consent of the Borrower not to be unreasonably withheld). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Environmental Laws</I></FONT><FONT size=2>": any and all foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
</FONT></P>
<P align=center><FONT size=2>4</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=4,SEQ=9,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=313245,FOLIO='4',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_5></A><BR>
<P><FONT size=2>Requirements of Law (including common law) regulating, relating
to or imposing liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time hereafter be in effect.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>ERISA</I></FONT><FONT size=2>": the Employee Retirement Income
Security Act of 1974, as amended from time to time. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eurocurrency Liabilities</I></FONT><FONT size=2>": as defined in
Regulation&nbsp;D of the Board. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eurocurrency Reserve Requirements</I></FONT><FONT size=2>": of any
Lender for any Interest Period as applied to a Eurodollar Loan, the reserve
percentage applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such percentages for
those days in such Interest Period during any such percentage shall be so
applicable) under any regulations of the Board or other Governmental Authority
having jurisdiction with respect to determining the maximum reserve requirement
(including basic, supplemental and emergency reserves) for such Lender with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eurodollar Base Rate</I></FONT><FONT size=2>": with respect to each
day during each Interest Period pertaining to a Eurodollar Loan, the rate per
annum determined on the basis of the rate for deposits in Dollars for a period
equal to such Interest Period commencing on the first day of such Interest
Period appearing on Page 3750 of the Telerate screen as of 11:00&nbsp;A.M.,
London time, two Business Days prior to the beginning of such Interest Period.
In the event that such rate does not appear on Page 3750 of the Telerate screen
(or otherwise on such screen), the "</FONT><FONT size=2><I>Eurodollar Base
Rate</I></FONT><FONT size=2>" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00&nbsp;A.M., New York City time, two Business Days
prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eurodollar Loans</I></FONT><FONT size=2>": Loans the rate of interest
applicable to which is based upon the Eurodollar Rate. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eurodollar Rate</I></FONT><FONT size=2>": with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula (rounded upward
to the nearest 1/100<SUP>th</SUP> of 1%): </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="63%" border=0>
   <TR vAlign=top>
    <TD width="22%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=middle width="50%"><FONT size=2>Eurodollar Base Rate</FONT>
      <HR noShade>
      <FONT size=2>
      1.00&nbsp;-&nbsp;Eurocurrency&nbsp;Reserve&nbsp;Requirements</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="22%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Eurodollar Tranche</I></FONT><FONT size=2>": the collective reference
to Eurodollar Loans the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Event of Default</I></FONT><FONT size=2>": any of the events specified
in Section&nbsp;8, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Exchange Act</I></FONT><FONT size=2>": Securities Exchange Act of
1934, as amended. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Extension Notice</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.7(b). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Extensions of Credit</I></FONT><FONT size=2>": as to any Lender at any
time, an amount equal to the sum of (a)&nbsp;the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding, (b)&nbsp;such Lender's
Percentage of the L/C Obligations then outstanding and (c)&nbsp;such Lender's
Percentage of the aggregate principal amount of Swingline Loans then
outstanding. </FONT></P>
<P align=center><FONT size=2>5</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=5,SEQ=10,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=104469,FOLIO='5',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_6></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Facility Fee Rate</I></FONT><FONT size=2>": for any day, shall be
(a)&nbsp;prior to the Trigger Date, 0.175% per annum and (b)&nbsp;from and after
the Trigger Date, the applicable rate per annum determined pursuant to the grid
set forth below, based upon the Ratings then in effect: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="67%" border=0>
  <TR vAlign=bottom>
    <TH align=left width="8%"><FONT size=1><B>Level<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="69%"><FONT size=1><B>Rating
      S&amp;P/Moody's</B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="15%"><FONT size=1><B>Facility Fee Rate</B></FONT>
      <HR noShade>
    </TH>
    <TH width="2%"><FONT size=1>&nbsp;</FONT></TH></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="8%"><FONT size=2>1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="69%"><FONT size=2><FONT face=SYMBOL>&gt;</FONT> BBB/Baa2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="15%"><FONT size=2>0.175</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="8%"><FONT size=2>2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="69%"><FONT size=2>BBB-/Baa3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="15%"><FONT size=2>0.20</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="8%"><FONT size=2>3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="69%"><FONT size=2>&lt; BBB-/Baa3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="15%"><FONT size=2>0.40</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P><FONT size=2>Subject to the provisions of this paragraph regarding split
ratings, from and after the Trigger Date, changes in the Facility Fee Rate shall
become effective on the date on which S&amp;P and/or Moody's changes its
relevant Rating. In the event the Ratings of S&amp;P and Moody's are in
different levels set forth in the grid above, the lower of the two Ratings
(</FONT><FONT size=2><I>i</I></FONT><FONT size=2>.</FONT><FONT
size=2><I>e</I></FONT><FONT size=2>., the Rating set forth in the grid above
opposite the higher numerical level number) shall govern. In the event that, at
any time, a Rating is not available from one of such rating agencies, the
Facility Fee Rate shall be determined on the basis of the Rating from the other
rating agency. In the event that, at any time, Ratings from each such rating
agency are not available for companies generally, the Facility Fee Rate shall be
determined on the basis of the last Rating(s) made available. In the event that,
at any time, such Ratings are not available for PG&amp;E Utility but are
generally available for other companies, then the Facility Fee Rate shall be
that set forth above opposite level 3. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Federal Funds Effective Rate</I></FONT><FONT size=2>": for any day,
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Fee Payment Date</I></FONT><FONT size=2>": (a)&nbsp;the third Business
Day following the last day of each March, June, September and December during
the Commitment Period, (b)&nbsp;the last day of the Commitment Period and
(c)&nbsp;the last day of each March, June, September and December after the last
day of the Commitment Period, so long as any principal amount of the Loans or
any Reimbursement Obligations remain outstanding after the last day of the
Commitment Period. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>FPA</I></FONT><FONT size=2>": the Federal Power Act, as amended, and
the rules and regulations promulgated thereunder. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Funding Office</I></FONT><FONT size=2>": the office of the
Administrative Agent specified in Section&nbsp;10.2 or such other office as may
be specified from time to time by the Administrative Agent as its funding office
by written notice to the Borrower and the Lenders. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>GAAP</I></FONT><FONT size=2>": generally accepted accounting
principles in the United States as in effect from time to time, except as noted
below. In the event that any "Change in Accounting Principles" (as defined
below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then,
upon the request of the Borrower or the Required Lenders, the Borrower and the
Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to reflect equitably such Change in
Accounting Principles with the desired result that the criteria for evaluating
the Borrower's financial condition shall be the same after such Change in
Accounting Principles as if such Change in Accounting Principles had not been
made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Change in Accounting Principles had not
occurred. "</FONT><FONT size=2><I>Change in Accounting
Principles</I></FONT><FONT size=2>" refers to changes in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the </FONT></P>
<P align=center><FONT size=2>6</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=6,SEQ=11,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=761347,FOLIO='6',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_7></A><BR>
<P><FONT size=2>Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or any successor thereto, the SEC or, if
applicable, the Public Company Accounting Oversight Board. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Governmental Authority</I></FONT><FONT size=2>": any nation or
government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government, any securities exchange
and any self-regulatory organization (including the National Association of
Insurance Commissioners). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Guarantee Obligation</I></FONT><FONT size=2>": as to any Person (the
"</FONT><FONT size=2><I>guaranteeing person</I></FONT><FONT size=2>"), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees any Indebtedness, leases, dividends
or other obligations (the "</FONT><FONT size=2><I>primary
obligations</I></FONT><FONT size=2>") of any other third Person (the
"</FONT><FONT size=2><I>primary obligor</I></FONT><FONT size=2>") in any manner,
whether directly or indirectly, including any obligation of the guaranteeing
person, whether or not contingent, (i)&nbsp;to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii)&nbsp;to advance or supply funds (1)&nbsp;for the purchase or payment of any
such primary obligation or (2)&nbsp;to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii)&nbsp;to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (iv)&nbsp;otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof or (v)&nbsp;to reimburse or
indemnify an issuer of a letter of credit, surety bond or guarantee issued by
such issuer in respect of primary obligations of a primary obligor other than
the Borrower or any Significant Subsidiary; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
size=2><I>however</I></FONT><FONT size=2>, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a)&nbsp;an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b)&nbsp;the maximum amount for
which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Indebtedness</I></FONT><FONT size=2>": of any Person at any date,
without duplication, (a)&nbsp;all indebtedness of such Person for borrowed
money, (b)&nbsp;all obligations of such Person for the deferred purchase price
of property or services (other than trade payables, including under energy
procurement and transportation contracts, incurred in the ordinary course of
such Person's business), (c)&nbsp;all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d)&nbsp;all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e)&nbsp;all obligations
of such Person as lessee which are capitalized in accordance with GAAP,
(f)&nbsp;all obligations of such Person, contingent or otherwise, as an account
party or applicant under or in respect of acceptances, letters of credit, surety
bonds or similar arrangements (other than reimbursement obligations, which are
not due and payable on such date, in respect of documentary letters of credit
issued to provide for the payment of goods and services in the ordinary course
of business), (g)&nbsp;the liquidation value of all mandatorily redeemable
preferred Capital Stock of such Person, (h)&nbsp;all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses
(a)&nbsp;through (g)&nbsp;above, (i)&nbsp;all obligations of the kind referred
to in clauses (a)&nbsp;through (h)&nbsp;above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation (</FONT><FONT size=2><I>provided</I></FONT><FONT
size=2>, that if such Person is not liable for such obligation, the </FONT></P>
<P align=center><FONT size=2>7</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=7,SEQ=12,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=1031065,FOLIO='7',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_8></A><BR>
<P><FONT size=2>amount of such Person's Indebtedness with respect thereto shall
be deemed to be the lesser of the stated amount of such obligation and the value
of the property subject to such Lien), and (j)&nbsp;for the purposes of
Section&nbsp;8(e) only, all obligations of such Person in respect of Swap
Agreements, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that
Indebtedness as used in this Agreement shall exclude any Non-Recourse Debt. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Insolvency</I></FONT><FONT size=2>": with respect to any Multiemployer
Plan, the condition that such Plan is insolvent within the meaning of
Section&nbsp;4245 of ERISA. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Insolvent</I></FONT><FONT size=2>": pertaining to a condition of
Insolvency. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Interest Payment Date</I></FONT><FONT size=2>": (a)&nbsp;as to any ABR
Loan (other than any Swingline Loan), the last day of each March, June,
September and December to occur while such Loan is outstanding and the final
maturity date of such Loan, (b)&nbsp;as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c)&nbsp;as to any Eurodollar Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period,
(d)&nbsp;as to any Eurodollar Loan, the date of any repayment or prepayment made
in respect thereof and (e)&nbsp;as to any Swingline Loan, the day that such Loan
is required to be repaid. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Interest Period</I></FONT><FONT size=2>": as to any Eurodollar Loan,
(a)&nbsp;initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such Eurodollar Loan and ending one, two,
three or six or (if available to all Lenders) nine or twelve months thereafter,
as selected by the Borrower in its notice of borrowing or notice of conversion,
as the case may be, given with respect thereto; and (b)&nbsp;thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six or (if
available to all Lenders) nine or twelve months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not later than 12:00
Noon, New York City time, on the date that is three Business Days prior to the
last day of the then current Interest Period with respect thereto; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2> that, all of the foregoing provisions
relating to Interest Periods are subject to the following: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;if
  any Interest Period would otherwise end on a day that is not a Business Day,
  such Interest Period shall be extended to the next succeeding Business Day
  unless the result of such extension would be to carry such Interest Period
  into another calendar month in which event such Interest Period shall end on
  the immediately preceding Business Day; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;the
  Borrower may not select an Interest Period that would extend beyond the
  Termination Date; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;any
  Interest Period that begins on the last Business Day of a calendar month (or
  on a day for which there is no numerically corresponding day in the calendar
  month at the end of such Interest Period) shall end on the last Business Day
  of a calendar month; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;the
  Borrower shall select Interest Periods so as not to require a payment or
  prepayment of any Eurodollar Loan during an Interest Period for such Loan.
  </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Issuing Lender</I></FONT><FONT size=2>": (a)&nbsp;BNP or any affiliate
thereof selected by BNP with the consent of the Borrower (such consent not to be
unreasonably withheld) and (b)&nbsp;any other Lender selected by the Borrower as
an Issuing Lender with the consent of such Lender and the Administrative Agent.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>L/C Commitment</I></FONT><FONT size=2>": $50,000,000. </FONT></P>
<P align=center><FONT size=2>8</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=8,SEQ=13,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=831492,FOLIO='8',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_de1542_1_9></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>L/C Obligations</I></FONT><FONT size=2>": at any time, an amount equal
to the sum of (a)&nbsp;the aggregate then undrawn and unexpired amount of the
then outstanding Letters of Credit and (b)&nbsp;the aggregate amount of drawings
under issued Letters of Credit that have not then been reimbursed pursuant to
Section&nbsp;3.5. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>L/C Participants</I></FONT><FONT size=2>": in respect of any Letter of
Credit, the collective reference to all the Lenders other than the Issuing
Lender that issued such Letter of Credit. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Lenders</I></FONT><FONT size=2>": as defined in the preamble hereto;
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2>, that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Letters of Credit</I></FONT><FONT size=2>": as defined in
Section&nbsp;3.1. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Lien</I></FONT><FONT size=2>": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Loan</I></FONT><FONT size=2>": any loan made by any Lender pursuant to
this Agreement, including Swingline Loans and Revolving Loans. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Loan Documents</I></FONT><FONT size=2>": this Agreement, the Notes and
the Applications. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Material Adverse Effect</I></FONT><FONT size=2>": a material adverse
effect on (a)&nbsp;the business, property, operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole, (b)&nbsp;the
validity or enforceability of this Agreement or any of the other Loan Documents
or (c)&nbsp;the Borrower's ability to perform its material obligations under
this Agreement and the Notes. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Materials of Environmental Concern</I></FONT><FONT size=2>": any
gasoline or petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Moody's</I></FONT><FONT size=2>": Moody's Investors Service,&nbsp;Inc.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Multiemployer Plan</I></FONT><FONT size=2>": a Plan that is a
multiemployer plan as defined in Section&nbsp;4001(a)(3) of ERISA. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>New Revolving Credit Lender</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.3(b). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Non-Excluded Taxes</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.16(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Non-Extending Lender</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.7. </FONT></P>
<P align=center><FONT size=2>9</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=9,SEQ=14,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=165580,FOLIO='9',FILE='DISK033:[04SFO2.04SFO1542]DE1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P><FONT size=2><A name=page_dg1542_1_10></A></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Non-Recourse Debt</I></FONT><FONT size=2>": Indebtedness of the
Borrower or any of its Significant Subsidiaries that is incurred in connection
with the acquisition, construction, sale, transfer or other disposition of
specific assets, to the extent recourse, whether contractual or as a matter of
law, for non-payment of such Indebtedness is limited (a)&nbsp;to such assets, or
(b)&nbsp;if such assets are (or are to be) held by a Subsidiary formed solely
for such purpose, to such Subsidiary or the Capital Stock of such Subsidiary.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Non-U.S. Lender</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.16(d). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Notes</I></FONT><FONT size=2>": as defined in Section&nbsp;2.14(f).
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Obligations</I></FONT><FONT size=2>": the unpaid principal of and
interest on (including, without limitation, interest accruing after the maturity
of the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to the Administrative Agent or to the Issuing Lender
or to any Lender, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>OECD</I></FONT><FONT size=2>": the countries constituting the
"Contracting Parties" to the Convention on the Organisation For Economic
Co-operation and Development, as such term is defined in Article&nbsp;4 of such
Convention. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Other Taxes</I></FONT><FONT size=2>": any and all present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Participant</I></FONT><FONT size=2>": as defined in
Section&nbsp;10.6(c). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>PBGC</I></FONT><FONT size=2>": the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA (or any
successor). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Percentage</I></FONT><FONT size=2>": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the Total
Commitment or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Revolving Loans then outstanding constitutes of the aggregate principal amount
of the Revolving Loans then outstanding, </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that, in the event that the
Revolving Loans are paid in full prior to the reduction to zero of the Total
Extensions of Credit, the Percentages shall be determined in a manner designed
to ensure that the other outstanding Extensions of Credit shall be held by the
Lenders on a comparable basis. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Person</I></FONT><FONT size=2>": an individual, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>PG&amp;E Utility</I></FONT><FONT size=2>": Pacific Gas&nbsp;&amp;
Electric Company, a California corporation. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>PG&amp;E Utility Credit Agreement</I></FONT><FONT size=2>": the
$850,000,000 credit agreement, dated as of March&nbsp;5, 2004, among PG&amp;E
Utility, the lenders parties thereto, the syndication agent and co-documentation
agents named therein and Citicorp North America&nbsp;Inc., as administrative
agent (as amended, supplemented, restated or otherwise modified from time to
time). </FONT></P>
<P align=center><FONT size=2>10</FONT></P>
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name=page_dg1542_1_11></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>PG&amp;E Utility Ownership Subsidiary</I></FONT><FONT size=2>": any
special purpose Subsidiary of PG&amp;E Utility, (a)&nbsp;all of the Capital
Stock of which is owned directly by PG&amp;E Utility (or by one or more other
Subsidiaries of PG&amp;E Utility) and (b)&nbsp;the sole purpose of which is to
own common stock of PG&amp;E Utility, which owns no material asset other than
such common stock and engages in no material activities other than the ownership
of such common stock and activities related thereto. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Plan</I></FONT><FONT size=2>": at a particular time, any employee
benefit plan that is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section&nbsp;4069 of ERISA be deemed to be) an "employer" as defined
in Section&nbsp;3(5) of ERISA. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Properties</I></FONT><FONT size=2>": as defined in
Section&nbsp;4.13(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>PUHCA</I></FONT><FONT size=2>": the Public Utility Holding Company Act
of 1935, as amended, and rules and regulations promulgated thereunder.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Rating</I></FONT><FONT size=2>": each Issuer Credit Rating announced
by S&amp;P or Issuer Rating announced by Moody's in respect of PG&amp;E Utility.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Refunded Swingline Loans</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.5. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Register</I></FONT><FONT size=2>": as defined in Section&nbsp;10.6(b).
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Regulation&nbsp;U</I></FONT><FONT size=2>": Regulation&nbsp;U of the
Board as in effect from time to time. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Reimbursement Obligation</I></FONT><FONT size=2>": the obligation of
the Borrower to reimburse each Issuing Lender pursuant to Section&nbsp;3.5 for
amounts drawn under Letters of Credit issued by such Issuing Lender. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Reorganization</I></FONT><FONT size=2>": with respect to any
Multiemployer Plan, the condition that such plan is in reorganization within the
meaning of Section&nbsp;4241 of ERISA. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Reportable Event</I></FONT><FONT size=2>": any of the events set forth
in Section&nbsp;4043(c) of ERISA, other than those events as to which the thirty
day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34
or .35 of PBGC Reg. Section 4043. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Required Lenders</I></FONT><FONT size=2>": at any time, the holders of
more than 50% of the Total Commitment then in effect or, if the Commitments have
been terminated, the Total Extensions of Credit then outstanding. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Requirement of Law</I></FONT><FONT size=2>": as to any Person, the
Articles of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Responsible Officer</I></FONT><FONT size=2>": the chief executive
officer, president, chief financial officer, treasurer or assistant treasurer of
the Borrower, but in any event, with respect to financial matters, the chief
financial officer, treasurer or assistant treasurer of the Borrower. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Revolving Credit Offered Increase Amount</I></FONT><FONT size=2>": as
defined in Section&nbsp;2.3(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Revolving Credit Re-Allocation Date</I></FONT><FONT size=2>": as
defined in Section&nbsp;2.3(d). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Revolving Loans</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.1(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>S&amp;P</I></FONT><FONT size=2>": Standard&nbsp;&amp; Poor's Ratings
Services. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>SEC</I></FONT><FONT size=2>": the Securities and Exchange Commission,
any successor thereto and any analogous Governmental Authority. </FONT></P>
<P align=center><FONT size=2>11</FONT></P>
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name=page_dg1542_1_12></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Significant Subsidiary</I></FONT><FONT size=2>": as defined in
Article&nbsp;1, Rule&nbsp;1-02(w) of Regulation&nbsp;S-X of the Exchange Act as
of the Closing Date, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>
that notwithstanding the foregoing, PG&amp;E Funding LLC, PG&amp;E Accounts
Receivable LLC, PG&amp;E Energy Recovery Funding LLC and any other special
purpose finance subsidiary shall not constitute a Significant Subsidiary. Unless
otherwise qualified, all references to a "Significant Subsidiary" or to
"Significant Subsidiaries" in this Agreement shall refer to a Significant
Subsidiary or Significant Subsidiaries of the Borrower. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Single Employer Plan</I></FONT><FONT size=2>": any Plan that is
covered by Title IV of ERISA, but that is not a Multiemployer Plan. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Specified Exchange Act Filings</I></FONT><FONT size=2>": the
Borrower's Form&nbsp;10-K annual report for the year ended December&nbsp;31,
2003 and each and all of the Form&nbsp;10-Qs and Form&nbsp;8-Ks (and to the
extent applicable proxy statements) filed by the Borrower with the SEC after
December&nbsp;31, 2003 and prior to the date of this Agreement. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Specified Indebtedness</I></FONT><FONT size=2>": the collective
reference to indebtedness of the types described in clauses (a), (c)&nbsp;and
(e)&nbsp;of the definition of "Indebtedness" in this Section&nbsp;1.1 and any
Guarantee Obligations in respect of any such Indebtedness. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Subsidiary</I></FONT><FONT size=2>": as to any Person, a corporation,
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Swap Agreement</I></FONT><FONT size=2>": any agreement with respect to
any swap, forward, future or derivative transaction or option or similar
agreement involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2> that no phantom stock or similar plan
providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or any of its
Subsidiaries shall be a "Swap Agreement". </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Swingline Commitment</I></FONT><FONT size=2>": the obligation of the
Swingline Lender to make Swingline Loans pursuant to Section&nbsp;2.3 in an
aggregate principal amount at any one time outstanding not to exceed
$100,000,000. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Swingline Lender</I></FONT><FONT size=2>": BNP, in its capacity as the
lender of Swingline Loans. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Swingline Loans</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.4. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Swingline Participation Amount</I></FONT><FONT size=2>": as defined in
Section&nbsp;2.5. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Syndication Agent</I></FONT><FONT size=2>": as defined in the preamble
hereto. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Termination Date</I></FONT><FONT size=2>": the date that is the third
anniversary of the Closing Date or such later date as may be determined pursuant
to Section&nbsp;2.7(b) or such earlier date as otherwise determined pursuant to
Section&nbsp;2.7. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Total Commitment</I></FONT><FONT size=2>": at any time, the aggregate
amount of the Commitments of all Lenders at such time. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Total Extensions of Credit</I></FONT><FONT size=2>": at any time, the
aggregate amount of the Extensions of Credit of all Lenders at such time.
</FONT></P>
<P align=center><FONT size=2>12</FONT></P>
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name=page_dg1542_1_13></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Transferee</I></FONT><FONT size=2>": any Assignee or Participant.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Trigger Date</I></FONT><FONT size=2>": the first to occur of
(a)&nbsp;the first anniversary of the Closing Date and (b)&nbsp;the date of any
downgrade of a Rating by S&amp;P or Moody's to a Rating lower than BBB- or Baa3,
as the case may be. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Type</I></FONT><FONT size=2>": as to any Loan, its nature as an ABR
Loan or a Eurodollar Loan. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>United States</I></FONT><FONT size=2>": the United States of America.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
size=2><I>Utilization Fee Rate</I></FONT><FONT size=2>": for any day, shall be
(a)&nbsp;prior to the Trigger Date, 0.125% per annum and (b)&nbsp;from and after
the Trigger Date, the applicable rate per annum determined pursuant to the grid
set forth below, based upon the Ratings then in effect: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="69%" border=0>
  <TR vAlign=bottom>
    <TH align=left width="8%"><FONT size=1><B>Level<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="68%"><FONT
      size=1><B>Rating<BR>S&amp;P/Moody's</B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="16%"><FONT size=1><B>Utilization
      Fee<BR>Rate</B></FONT>
      <HR noShade>
    </TH>
    <TH width="2%"><FONT size=1>&nbsp;</FONT></TH></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="8%"><FONT size=2>1</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="68%"><font face="SYMBOL" size="2">&gt;</font><FONT size=2>  BBB/Baa2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.125</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR>
  <TR vAlign=top bgColor=white>
    <TD width="8%"><FONT size=2>2</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="68%"><FONT size=2>BBB-/Baa3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.125</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="8%"><FONT size=2>3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="68%"><FONT size=2>&lt; BBB-/Baa3</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="16%"><FONT size=2>0.25</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P><FONT size=2>Subject to the provisions of this paragraph regarding split
ratings, from and after the Trigger Date, changes in the Utilization Fee Rate
shall become effective on the date on which S&amp;P and/or Moody's changes its
relevant Rating. In the event the Ratings of S&amp;P and Moody's are in
different levels set forth in the grid above, the lower of the two Ratings
(</FONT><FONT size=2><I>i</I></FONT><FONT size=2>.</FONT><FONT
size=2><I>e</I></FONT><FONT size=2>., the Rating set forth in the grid above
opposite the higher numerical level number) shall govern. In the event that, at
any time, a Rating is not available from one of such rating agencies, the
Utilization Fee Rate shall be determined on the basis of the Rating from the
other rating agency. In the event that, at any time, Ratings from each such
rating agency are not available for companies generally, the Utilization Fee
Rate shall be determined on the basis of the last Rating(s) made available. In
the event that, at any time, such Ratings are not available for PG&amp;E Utility
but are generally available for other companies, then the Utilization Fee Rate
shall be that set forth above opposite level 3. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Definitional Provisions and Interpretive
Provisions.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;As
  used herein and, except as otherwise provided therein, in the other Loan
  Documents, and any certificate or other document made or delivered pursuant
  hereto or thereto, (i)&nbsp;accounting terms relating to the Borrower and its
  Significant Subsidiaries defined in Section&nbsp;1.1 and accounting terms
  partly defined in Section&nbsp;1.1, to the extent not defined, shall have the
  respective meanings given to them under GAAP, (ii)&nbsp;the words "include",
  "includes" and "including" shall be deemed to be followed by the phrase
  "without limitation", (iii)&nbsp;the word "incur" shall be construed to mean
  incur, create, issue, assume or become liable in respect of (and the words
  "incurred" and "incurrence" shall have correlative meanings), (iv)&nbsp;the
  words "asset" and "property" shall be construed to have the same meaning and
  effect and to refer to any and all tangible and intangible assets and
  properties, including cash, Capital Stock, securities, revenues, accounts,
  leasehold interests and contract rights, and (v)&nbsp;references to agreements
  or other Contractual Obligations shall, unless otherwise specified, be deemed
  to refer to such agreements or Contractual Obligations as amended,
  supplemented, restated or otherwise modified from time to time. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
  words "hereof", "herein" and "hereunder" and words of similar import, when
  used in this Agreement, shall refer to this Agreement as a whole and not to
  any particular provision of this Agreement, and Section, Schedule and Exhibit
  references are to this Agreement unless otherwise specified. </FONT></P></UL>
<P align=center><FONT size=2>13</FONT></P>
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<UL><BR>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
  meanings given to terms defined herein shall be equally applicable to both the
  singular and plural forms of such terms. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;The
  Borrower shall not be required to perform, nor shall it be required to
  guarantee the performance of, any of the affirmative covenants set forth in
  Section&nbsp;6 that apply to any of its Significant Subsidiaries nor shall any
  of the Borrower's Significant Subsidiaries be required to perform, nor shall
  any of such Significant Subsidiaries be required to guarantee the performance
  of, any of the Borrower's affirmative covenants set forth in Section&nbsp;6 or
  any of the affirmative covenants set forth in Section&nbsp;6 that apply to any
  other Significant Subsidiary; </FONT><FONT size=2><I>provided</I></FONT><FONT
  size=2>, that nothing in this Section&nbsp;1.2(e) shall prevent the occurrence
  of a Default or an Event of Default arising out of the Borrower's failure to
  cause any Significant Subsidiary to comply with the provisions of this
  Agreement applicable to such Significant Subsidiary. </FONT></P></UL>
<P align=center><FONT size=2><B>SECTION&nbsp;2. AMOUNT AND TERMS OF COMMITMENTS
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Commitments.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("</FONT><FONT size=2><I>Revolving Loans</I></FONT><FONT size=2>") to the
Borrower from time to time on or after the Closing Date and during the
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Percentage of the sum of (i)&nbsp;the L/C
Obligations then outstanding and (ii)&nbsp;the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of such Lender's
Commitment. On and after the Closing Date and during the Commitment Period, the
Borrower may use the Commitments by borrowing, prepaying the Revolving Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.2 and 2.9. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
  Borrower shall repay all outstanding Revolving Loans on the Termination Date.
  </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure for Revolving Loan
Borrowing</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower may borrow
under the Commitments during the Commitment Period on any Business Day,
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:00 Noon, New York City time,
(a)&nbsp;three Business Days prior to the requested Borrowing Date, in the case
of Eurodollar Loans, or (b)&nbsp;one Business Day prior to the requested
Borrowing Date, in the case of ABR Loans) specifying (i)&nbsp;the amount and
Type of Revolving Loans to be borrowed, (ii)&nbsp;the requested Borrowing Date
and (iii)&nbsp;in the case of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Period
therefor. Each borrowing under the Commitments shall be in an amount equal to
(x)&nbsp;in the case of ABR Loans, $1,000,000 or an integral multiple of
$500,000 in excess thereof (or, if the then aggregate Available Commitments are
less than $1,000,000, such lesser amount) and (y)&nbsp;in the case of Eurodollar
Loans, $1,000,000 or an integral multiple of $500,000 in excess thereof;
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2>, that the Swingline
Lender may request, on behalf of the Borrower, borrowings under the Commitments
that are ABR Loans in other amounts pursuant to Section&nbsp;2.5. Upon receipt
of any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its </FONT><FONT
size=2><I>pro rata</I></FONT><FONT size=2> share of each borrowing available to
the Administrative Agent for the account of the Borrower at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Commitment Increases.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;In
  the event that the Borrower wishes to increase the Total Commitment at any
  time when no Default or Event of Default has occurred and is continuing (or
  shall result of such </FONT></P></UL>
<P align=center><FONT size=2>14</FONT></P>
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name=page_dg1542_1_15></A>
<UL>
  <P><FONT size=2>increase), it shall notify the Administrative Agent in writing
  of the amount (the "</FONT><FONT size=2><I>Revolving Credit Offered Increase
  Amount</I></FONT><FONT size=2>") of such proposed increase (such notice, a
  "</FONT><FONT size=2><I>Commitment Increase Notice</I></FONT><FONT size=2>")
  in a minimum amount equal to $10,000,000. The Borrower shall offer each of the
  Lenders the opportunity to provide such Lender's Percentage of the Revolving
  Credit Offered Increase Amount, and if any Lender declines such offer, in
  whole or in part, the Borrower may offer such declined amount to
  (i)&nbsp;other Lenders and/or (ii)&nbsp;other banks, financial institutions or
  other entities with the consent of the Administrative Agent and, unless any
  such other bank, financial institution or other entity would qualify as an
  Eligible Assignee, the Issuing Lender (which consents of the Administrative
  Agent and the Issuing Lender shall not be unreasonably withheld or delayed).
  The Commitment Increase Notice shall specify the Lenders and/or banks,
  financial institutions or other entities that will be requested to provide
  such Revolving Credit Offered Increase Amount. The Borrower or, if requested
  by the Borrower, the Administrative Agent will notify such Lenders, and/or
  banks, financial institutions or other entities of such offer. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Any
  additional bank, financial institution or other entity which the Borrower
  selects to offer a portion of the increased Total Commitment and which elects
  to become a party to this Agreement and obtain a Commitment in an amount so
  offered and accepted by it pursuant to Section&nbsp;2.3(a) shall execute a New
  Lender Supplement with the Borrower, the Issuing Lender and the Administrative
  Agent, substantially in the form of Exhibit&nbsp;A, whereupon such bank,
  financial institution or other entity (herein called a "</FONT><FONT
  size=2><I>New Revolving Credit Lender</I></FONT><FONT size=2>") shall become a
  Lender for all purposes and to the same extent as if originally a party hereto
  and shall be bound by and entitled to the benefits of this Agreement,
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that the Commitment of
  any such New Revolving Credit Lender shall be in an amount not less than
  $10,000,000. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Any
  Lender which accepts an offer to it by the Borrower to increase its Commitment
  pursuant to Section&nbsp;2.3(a) shall, in each case, execute a Commitment
  Increase Supplement with the Borrower and the Administrative Agent,
  substantially in the form of Exhibit&nbsp;B, whereupon such Lender shall be
  bound by and entitled to the benefits of this Agreement with respect to the
  full amount of its Commitment as so increased. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;If
  any bank, financial institution or other entity becomes a New Revolving Credit
  Lender pursuant to Section&nbsp;2.3(b) or any Lender's Commitment is increased
  pursuant to Section&nbsp;2.3(c), additional Revolving Loans made on or after
  the effectiveness thereof (the "</FONT><FONT size=2><I>Revolving Credit
  Re-Allocation Date</I></FONT><FONT size=2>") shall be made </FONT><FONT
  size=2><I>pro rata</I></FONT><FONT size=2> based on the Percentages in effect
  on and after such Revolving Credit Re-Allocation Date (except to the extent
  that any such </FONT><FONT size=2><I>pro rata</I></FONT><FONT size=2>
  borrowings would result in any Lender making an aggregate principal amount of
  Revolving Loans in excess of its Commitment, in which case such excess amount
  will be allocated to, and made by, such New Revolving Credit Lenders and/or
  Lenders with such increased Commitments to the extent of, and </FONT><FONT
  size=2><I>pro rata</I></FONT><FONT size=2> based on, their respective
  Commitments otherwise available for Revolving Loans), and continuations of
  Eurodollar Loans outstanding on such Revolving Credit Re-Allocation Date shall
  be effected by repayment of such Eurodollar Loans on the last day of the
  Interest Period applicable thereto and the making of new Eurodollar Loans
  </FONT><FONT size=2><I>pro rata</I></FONT><FONT size=2> based on such new
  Percentages. In the event that on any such Revolving Credit Re-Allocation Date
  there is an unpaid principal amount of ABR Loans, the Borrower shall make
  prepayments thereof and borrowings of ABR Loans so that, after giving effect
  thereto, the ABR Loans outstanding are held </FONT><FONT size=2><I>pro
  rata</I></FONT><FONT size=2> based on such new Percentages. In the event that
  on any such Revolving Credit Re-Allocation Date there is an unpaid principal
  amount of Eurodollar Loans, such Eurodollar Loans shall remain outstanding
  with the respective holders thereof until the expiration of their respective
  Interest Periods (unless the Borrower elects to prepay any thereof in
  accordance with the applicable provisions of this Agreement), and interest on
  and repayments of such Eurodollar Loans will be paid thereon to the respective
  Lenders holding such Eurodollar Loans </FONT><FONT size=2><I>pro
  rata</I></FONT><FONT size=2> based on the respective principal amounts thereof
  outstanding. </FONT></P></UL>
<P align=center><FONT size=2>15</FONT></P>
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name=page_dg1542_1_16></A>
<UL><BR>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Notwithstanding
  anything to the contrary in this Section&nbsp;2.3, (i)&nbsp;in no event shall
  any transaction effected pursuant to this Section&nbsp;2.3 cause the Total
  Commitment to exceed $300,000,000, (ii)&nbsp;in no event may the Borrower
  deliver more than one Commitment Increase Notice each year and (iii)&nbsp;no
  Lender shall have any obligation to increase its Commitment unless it agrees
  to do so in its sole discretion. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The
  Administrative Agent shall have received on or prior to the Revolving Credit
  Re-Allocation Date, for the benefit of the Lenders, (i)&nbsp;a legal opinion
  of counsel to the Borrower covering such matters as are customary for
  transactions of this type as may be reasonably requested by the Administrative
  Agent, which opinions shall be substantially the same, to the extent
  appropriate, as the opinions rendered by counsel to the Borrower on the
  Closing Date and (ii)&nbsp;certified copies of resolutions of the board of
  directors of the Borrower authorizing the Borrower to borrow the Revolving
  Credit Offered Increase Amount. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Swingline Commitment.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Subject
  to the terms and conditions hereof, the Swingline Lender agrees to make a
  portion of the credit otherwise available to the Borrower under the
  Commitments from time to time on or after the Closing Date during the
  Commitment Period by making swing line loans ("</FONT><FONT
  size=2><I>Swingline Loans</I></FONT><FONT size=2>") to the Borrower;
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that (i)&nbsp;the
  aggregate principal amount of Swingline Loans outstanding at any time shall
  not exceed the Swingline Commitment then in effect (notwithstanding that the
  Swingline Loans outstanding at any time, when aggregated with the Swingline
  Lender's other outstanding Revolving Loans, may exceed the Swingline
  Commitment or the Swingline Lender's Commitment then in effect) and
  (ii)&nbsp;the Borrower shall not request, and the Swingline Lender shall not
  make, any Swingline Loan if, after giving effect to the making of such
  Swingline Loan, the aggregate amount of the Available Commitments of all
  Lenders would be less than zero. During the Commitment Period, the Borrower
  may use the Swingline Commitment by borrowing, repaying and reborrowing, all
  in accordance with the terms and conditions hereof. Swingline Loans shall be
  ABR Loans only. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
  Borrower shall repay to the Swingline Lender the then unpaid principal amount
  of each Swingline Loan on or prior to the date that is the earlier of
  (i)&nbsp;30&nbsp;days after the date such Swingline Loan is made and
  (ii)&nbsp;the Termination Date; </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that on each date on which a
  Revolving Loan is borrowed, the Borrower shall repay all Swingline Loans then
  outstanding. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure for Swingline Borrowing; Refunding
of Swingline Loans.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Whenever the Borrower wishes to borrow
Swingline Loans it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00&nbsp;P.M., New York City time, on the
proposed Borrowing Date), specifying (i)&nbsp;the amount to be borrowed and
(ii)&nbsp;the requested Borrowing Date (which shall be a Business Day during the
Commitment Period). Each borrowing under the Swingline Commitment shall be in an
amount equal to $100,000 or a whole multiple of $100,000 in excess thereof. Not
later than 2:00&nbsp;P.M., New York City time, on the Borrowing Date specified
in a notice in respect of Swingline Loans, the Swingline Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swingline Loan to be made
by the Swingline Lender. The Administrative Agent shall make the proceeds of
such Swingline Loan available to the Borrower on such Borrowing Date by
depositing such proceeds in the account of the Borrower with the Administrative
Agent on such Borrowing Date in immediately available funds. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
  Swingline Lender, at any time and from time to time in its sole and absolute
  discretion may, on behalf of the Borrower (which hereby irrevocably directs
  the Swingline Lender to act on its behalf), on one Business Day's notice given
  by the Swingline Lender no later than 12:00 Noon, New York City time, request
  each Lender to make, and each Lender hereby agrees to make, a Revolving Loan,
  in an amount equal to such Lender's Percentage of the aggregate amount
  </FONT></P></UL>
<P align=center><FONT size=2>16</FONT></P>
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<UL>
  <P><FONT size=2>of the Swingline Loans (the "</FONT><FONT size=2><I>Refunded
  Swingline Loans</I></FONT><FONT size=2>") outstanding on the date of such
  notice, to repay the Swingline Lender. Each Lender shall make the amount of
  such Revolving Loan available to the Administrative Agent at the Funding
  Office in immediately available funds, not later than 10:00&nbsp;A.M., New
  York City time, one Business Day after the date of such notice. The proceeds
  of such Revolving Loans shall be immediately made available by the
  Administrative Agent to the Swingline Lender for application by the Swingline
  Lender to the repayment of the Refunded Swingline Loans. The Borrower
  irrevocably authorizes the Swingline Lender to charge the Borrower's accounts
  with the Administrative Agent (up to the amount available in each such
  account) in order to immediately pay the amount of such Refunded Swingline
  Loans to the extent amounts received from the Lenders are not sufficient to
  repay in full such Refunded Swingline Loans. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If
  prior to the time a Revolving Loan would have otherwise been made pursuant to
  Section&nbsp;2.5(b), one of the events described in Section&nbsp;8(f) shall
  have occurred and be continuing with respect to the Borrower or if for any
  other reason, as determined by the Swingline Lender in its sole discretion,
  Revolving Loans may not be made as contemplated by Section&nbsp;2.5(b), each
  Lender shall, on the date such Revolving Loan was to have been made pursuant
  to the notice referred to in Section&nbsp;2.5(b), purchase for cash an
  undivided participating interest in the then outstanding Swingline Loans by
  paying to the Swingline Lender an amount (the "</FONT><FONT
  size=2><I>Swingline Participation Amount</I></FONT><FONT size=2>") equal to
  (i)&nbsp;such Lender's Percentage </FONT><FONT size=2><I>times</I></FONT><FONT
  size=2> (ii)&nbsp;the sum of the aggregate principal amount of Swingline Loans
  then outstanding that were to have been repaid with such Revolving Loans.
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Whenever,
  at any time after the Swingline Lender has received from any Lender such
  Lender's Swingline Participation Amount, the Swingline Lender receives any
  payment on account of the Swingline Loans, the Swingline Lender will
  distribute to such Lender its Swingline Participation Amount (appropriately
  adjusted, in the case of interest payments, to reflect the period of time
  during which such Lender's participating interest was outstanding and funded
  and, in the case of principal and interest payments, to reflect such Lender's
  </FONT><FONT size=2><I>pro rata</I></FONT><FONT size=2> portion of such
  payment if such payment is not sufficient to pay the principal of and interest
  on all Swingline Loans then due); </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
  size=2><I>however</I></FONT><FONT size=2>, that in the event that such payment
  received by the Swingline Lender is required to be returned, such Lender will
  return to the Swingline Lender any portion thereof previously distributed to
  it by the Swingline Lender. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Each
  Lender's obligation to make the Loans referred to in Section&nbsp;2.5(b) and
  to purchase participating interests pursuant to Section&nbsp;2.5(c) shall be
  absolute and unconditional and shall not be affected by any circumstance,
  including (i)&nbsp;any setoff, counterclaim, recoupment, defense or other
  right that such Lender or the Borrower may have against the Swingline Lender,
  the Borrower or any other Person for any reason whatsoever, (ii)&nbsp;the
  occurrence or continuance of a Default or an Event of Default or the failure
  to satisfy any of the other conditions specified in Section&nbsp;5,
  (iii)&nbsp;any adverse change in the condition (financial or otherwise) of the
  Borrower, (iv)&nbsp;any breach of this Agreement or any other Loan Document by
  the Borrower or any other Lender or (v)&nbsp;any other circumstance, happening
  or event whatsoever, whether or not similar to any of the foregoing.
  </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Facility Fees, Utilization Fees,
etc.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Borrower agrees
to pay to the Administrative Agent for the account of each Lender a facility fee
for the period from and including the date hereof to the last day of the
Commitment Period, computed at the Facility Fee Rate on the Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on each Fee Payment Date, commencing on the first such date to occur after the
date hereof. In addition, if the principal amount of any Loan, or any
Reimbursement Obligations, shall remain outstanding and unpaid after the last
day of the Commitment Period, the Borrower agrees to pay to the Administrative
Agent, for the account of each Lender, a facility fee for the period from the
last day of the Commitment Period until the date on which such amounts are
repaid in full, computed at the Facility Fee Rate on such amounts, payable
quarterly in arrears on each Fee Payment Date, commencing on the first such date
after the last day of the Commitment Period. </FONT></P>
<P align=center><FONT size=2>17</FONT></P>
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<P><FONT size=2><A name=page_di1542_1_18></A></FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
  the average daily aggregate principal amount of the Loans and L/C Obligations
  outstanding for the calendar quarter preceding a Fee Payment Date (or such
  shorter period beginning with the date hereof or ending with the Termination
  Date) is 50% of the daily average Total Commitment for such calendar quarter
  or period, the Borrower agrees to pay to the Administrative Agent for the
  account of each Lender a utilization fee at the applicable Utilization Fee
  Rate on such average daily aggregate principal amount of the Loans and the L/C
  Obligations outstanding during such calendar quarter (or shorter period),
  payable in arrears on each Fee Payment Date. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
  Borrower agrees to pay to the Administrative Agent the fees in the amounts and
  on the dates as set forth in any written, duly executed fee agreements with
  the Administrative Agent and to perform any other obligations contained
  therein. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination or Reduction of Commitments;
Extension of Termination Date.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Borrower shall have the right, upon
not less than three Business Days' notice to the Administrative Agent, to
terminate the Commitments or, from time to time, to reduce the amount of the
Commitments; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that no
such termination or reduction of Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Loans and Swingline Loans
made on the effective date thereof, the Total Extensions of Credit would exceed
the Total Commitment. Any such reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Commitments then in effect. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
  Borrower may, by written notice to the Administrative Agent (such notice being
  an "</FONT><FONT size=2><I>Extension Notice</I></FONT><FONT size=2>") given no
  more frequently than once in each calendar year, request the Lenders to
  consider an extension of the then applicable Termination Date to a later date.
  The Administrative Agent shall promptly transmit any Extension Notice to each
  Lender. Each Lender shall notify the Administrative Agent whether it wishes to
  extend the then applicable Termination Date not later than thirty days after
  the date of such Extension Notice, and any such notice given by a Lender to
  the Administrative Agent, once given, shall be irrevocable as to such Lender.
  Any Lender which does not expressly notify the Administrative Agent prior to
  the expiration of such thirty-day period that it wishes to so extend the then
  applicable Termination Date shall be deemed to have rejected the Borrower's
  request for extension of such Termination Date. Lenders consenting to extend
  the then applicable Termination Date are hereinafter referred to as
  "</FONT><FONT size=2><I>Continuing Lenders</I></FONT><FONT size=2>", and
  Lenders declining to consent to extend such Termination Date (or Lenders
  deemed to have so declined) are hereinafter referred to as "</FONT><FONT
  size=2><I>Non-Extending Lenders</I></FONT><FONT size=2>". If the Required
  Lenders have elected (in their sole and absolute discretion) to so extend the
  Termination Date, the Administrative Agent shall promptly notify the Borrower
  of such election by the Required Lenders, and effective on the date which is
  thirty days after the date of such notice by the Administrative Agent to the
  Borrower, the Termination Date shall be automatically and immediately so
  extended as to the Continuing Lenders. No extension will be permitted
  hereunder without the consent of the Required Lenders. Upon the delivery of an
  Extension Notice and upon the extension of the Termination Date pursuant to
  this Section, the Borrower shall be deemed to have represented and warranted
  on and as of the date of such Extension Notice and the effective date of such
  extension, as the case may be, that no Default or Event of Default has
  occurred and is continuing. Notwithstanding anything contained in this
  Agreement to the contrary, no Lender shall have any obligation to extend the
  Termination Date, and each Lender may at its option, unconditionally and
  without cause, decline to extend the Termination Date. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If
  the Termination Date shall have been extended in accordance with this Section,
  all references herein to the "Termination Date" (except with respect to any
  Non-Extending Lender) shall refer to the Termination Date as so extended.
  </FONT></P></UL>
<P align=center><FONT size=2>18</FONT></P>
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<UL><BR>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;If
  any Lender shall determine (or be deemed to have determined) not to extend the
  Termination Date as requested by any Extension Notice given by the Borrower
  pursuant to this Section, the Commitment of such Non-Extending Lender
  (including the obligations of such Lender under Section&nbsp;2.5 and 3.4)
  shall terminate on the Termination Date without giving any effect to such
  proposed extension, and the Borrower shall on such date pay to the
  Administrative Agent, for the account of such Non-Extending Lender, the
  principal amount of, and accrued interest on, such Non-Extending Lender's
  Loans and outstanding Reimbursement Obligations, together with any amounts
  payable to such Lender pursuant to Section&nbsp;2.17 and any and all fees or
  other amounts owing to such Non-Extending Lender under this Agreement;
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that if the Borrower
  has replaced such Non-Extending Lender pursuant to paragraph&nbsp;(e) below
  then the provisions of such paragraph shall apply. The Total Commitment (but
  not, for the avoidance of doubt, except as hereinafter provided, the L/C
  Commitment) shall be reduced by the amount of the Commitment of such
  Non-Extending Lender to the extent the Commitment of such Non-Extending Lender
  has </FONT><FONT size=2><I>not</I></FONT><FONT size=2> been transferred to one
  or more Continuing Lenders pursuant to paragraph&nbsp;(e) below, </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that, if the Total Commitment,
  after giving effect to the reduction in the Total Commitment due to
  Non-Extending Lenders which are not replaced pursuant to paragraph&nbsp;(e)
  below, is less than the L/C Commitment, the L/C Commitment shall be reduced by
  an amount equal to such excess. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;A
  Non-Extending Lender shall be obligated, at the request of the Borrower and
  subject to (i)&nbsp;payment by the successor Lender described below to the
  Administrative Agent for the account of such Non-Extending Lender of the
  principal amount of, and accrued interest on, such Non-Extending Lender's
  Loans, and (ii)&nbsp;payment by the Borrower to such Non-Extending Lender of
  any amounts payable to such Non-Extending Lender pursuant to Section&nbsp;2.17
  (as if the purchase of such Non-Extending Lender's Loans constituted a
  prepayment thereof) and any and all fees or other amounts owing to such
  Non-Extending Lender under this Agreement, to transfer without recourse,
  representation, warranty (other than a representation that such Lender has not
  created an adverse claim on its Loans) or expense to such Non-Extending
  Lender, at any time prior to the Termination Date applicable to such
  Non-Extending Lender, all of such Non-Extending Lender's rights and
  obligations hereunder to another financial institution or group of financial
  institutions nominated by the Borrower and willing to participate as a
  successor Lender in the place of such Non-Extending Lender; </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that, if such transferee is not
  already a Lender, (1)&nbsp;such transferee satisfies all the requirements of
  this Agreement, and (2)&nbsp;the Administrative Agent and, with respect to any
  replacement Lender that is not an Eligible Assignee, each Issuing Lender,
  shall have consented to such transfer, which consent shall not be unreasonably
  withheld or delayed. Each such transferee successor Lender shall be deemed to
  be a Continuing Lender hereunder in replacement of the transferor
  Non-Extending Lender and shall enjoy all rights and assume all obligations on
  the part of such Non-Extending Lender set forth in this Agreement. Each such
  transfer shall be effected pursuant to an Assignment and Assumption.
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;If
  the Termination Date shall have been extended in respect of Continuing Lenders
  in accordance with this Section, any notice of borrowing pursuant to
  Section&nbsp;2.2 specifying a Borrowing Date occurring after the Termination
  Date applicable to a Non-Extending Lender or requesting an Interest Period
  extending beyond such date shall (i)&nbsp;have no effect in respect of such
  Non-Extending Lender and (ii)&nbsp;not specify a requested aggregate principal
  amount exceeding the Aggregate Available Commitment (calculated on the basis
  of the Commitments of the Continuing Lenders). </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Optional Prepayments.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 12:00
Noon, New York City time, three Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 12:00 Noon, New York City time, one
</FONT></P>
<P align=center><FONT size=2>19</FONT></P>
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<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=24,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=422385,FOLIO='19',FILE='DISK033:[04SFO2.04SFO1542]DI1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_di1542_1_20></A>
<P><FONT size=2>Business Day prior thereto, in the case of ABR Loans, which
notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or ABR Loans; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that if a Eurodollar Loan is prepaid
on any day other than the last day of the Interest Period applicable thereto,
the Borrower shall also pay any amounts owing pursuant to Section&nbsp;2.17.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Loans that are ABR Loans and Swingline
Loans) accrued interest to such date on the amount prepaid. Partial prepayments
of Revolving Loans which are (i)&nbsp;Eurodollar Loans shall be in an aggregate
principal amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof or (b)&nbsp;ABR Loans shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof. Partial
prepayments of Swingline Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Conversion and Continuation
Options.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
12:00 Noon, New York City time, on the Business Day preceding the proposed
conversion date, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that
any such conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto. The Borrower may elect from time to time
to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent
prior irrevocable notice of such election no later than 12:00 Noon, New York
City time, on the third Business Day preceding the proposed conversion date
(which notice shall specify the length of the initial Interest Period therefor),
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that no ABR Loan may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Required Lenders have determined in their sole discretion not
to permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Any
  Eurodollar Loan may be continued as such upon the expiration of the then
  current Interest Period with respect thereto by the Borrower giving
  irrevocable notice to the Administrative Agent, in accordance with the
  applicable provisions of the term "Interest Period" set forth in
  Section&nbsp;1.1, of the length of the next Interest Period to be applicable
  to such Loans, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that no
  Eurodollar Loan may be continued as such when any Event of Default has
  occurred and is continuing and the Required Lenders have determined in their
  sole discretion not to permit such continuations, and </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
  size=2><I>further</I></FONT><FONT size=2>, that if the Borrower shall fail to
  give any required notice as described above in this paragraph or if such
  continuation is not permitted pursuant to the preceding proviso such Loans
  shall be automatically converted to ABR Loans on the last day of such then
  expiring Interest Period. Upon receipt of any such notice the Administrative
  Agent shall promptly notify each relevant Lender thereof. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Limitations on Eurodollar
Tranches.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans and all selections of Interest Periods shall
be in such amounts and be made pursuant to such elections so that,
(a)&nbsp;after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $1,000,000
or a whole multiple of $500,000 in excess thereof and (b)&nbsp;no more than 15
Eurodollar Tranches shall be outstanding at any one time. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Interest Rates and Payment
Dates.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
</FONT><FONT size=2><I>plus</I></FONT><FONT size=2> the Applicable Margin.
</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
  ABR Loan shall bear interest at a rate per annum equal to the ABR </FONT><FONT
  size=2><I>plus</I></FONT><FONT size=2> the Applicable Margin. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;(i)&nbsp;If
  all or a portion of the principal amount of any Loan or Reimbursement
  Obligation shall not be paid when due (whether at the stated maturity, by
  acceleration or otherwise), such </FONT></P></UL>
<P align=center><FONT size=2>20</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=25,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=974784,FOLIO='20',FILE='DISK033:[04SFO2.04SFO1542]DI1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_di1542_1_21></A>
<UL><BR>
  <P><FONT size=2>overdue amount shall bear interest at a default rate per annum
  equal to (x)&nbsp;in the case of the Loans, the rate that would otherwise be
  applicable thereto pursuant to the foregoing provisions of this Section
  </FONT><FONT size=2><I>plus</I></FONT><FONT size=2> 2% or (y)&nbsp;in the case
  of Reimbursement Obligations, the rate applicable to ABR Loans </FONT><FONT
  size=2><I>plus</I></FONT><FONT size=2> 2%, and (ii)&nbsp;if all or a portion
  of any interest payable on any Loan or Reimbursement Obligation or any
  facility fee, utilization fee, letter of credit fee, or any other fee payable
  (excluding any expenses or other indemnity) hereunder shall not be paid when
  due (whether at the stated maturity, by acceleration or otherwise), such
  overdue amount shall bear interest at a default rate per annum equal to the
  rate then applicable to ABR Loans </FONT><FONT size=2><I>plus</I></FONT><FONT
  size=2> 2%, in each case, with respect to clauses (i)&nbsp;and
  (ii)&nbsp;above, from the date of such non-payment until such amount is paid
  in full (as well after as before judgment). </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Interest
  shall be payable in arrears on each Interest Payment Date, </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that interest accruing pursuant to
  paragraph&nbsp;(c) of this Section shall be payable from time to time on
  demand. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Computation of Interest and
Fees.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Base Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
  determination of an interest rate by the Administrative Agent pursuant to any
  provision of this Agreement shall constitute prima facie evidence of such
  amounts. The Administrative Agent shall, at the request of the Borrower or any
  Lender, deliver to the Borrower or such Lender a statement showing the
  quotations used by the Administrative Agent in determining any interest rate
  pursuant to Section&nbsp;2.11. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Inability to Determine Interest
Rate.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;If prior to the first day
of any Interest Period: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
  Administrative Agent shall have determined (which determination shall be
  conclusive and binding upon the Borrower) that, by reason of circumstances
  affecting the relevant market, adequate and reasonable means do not exist for
  ascertaining the Eurodollar Rate for such Interest Period, or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
  Administrative Agent shall have received notice from the Required Lenders that
  the Eurodollar Rate determined or to be determined for such Interest Period
  will not adequately and fairly reflect the cost to such Lenders (as
  conclusively certified by such Lenders) of making or maintaining their
  affected Loans during such Interest Period, </FONT></P></UL>
<P><FONT size=2>the Administrative Agent shall give telecopy or telephonic
notice thereof to the Borrower and the relevant Lenders as soon as practicable
thereafter. If such notice is given (x)&nbsp;any Eurodollar Loans requested to
be made on the first day of such Interest Period shall be made as ABR Loans,
(y)&nbsp;any Loans that were to have been converted on the first day of such
Interest Period to Eurodollar Loans shall be continued as ABR Loans and
(z)&nbsp;any outstanding Eurodollar Loans shall be converted, on the last day of
the then-current Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made
or continued as such, nor shall the Borrower have the right to convert Loans to
Eurodollar Loans. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Pro Rata Treatment and Payments;
Notes.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any </FONT></P>
<P align=center><FONT size=2>21</FONT></P>
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name=page_di1542_1_22></A><BR>
<P><FONT size=2>reduction of the Commitments of the Lenders shall be made
</FONT><FONT size=2><I>pro rata</I></FONT><FONT size=2> according to the
respective Percentages of the Lenders. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
  payment (including each prepayment) by the Borrower on account of principal of
  and interest on the Revolving Loans shall be made </FONT><FONT size=2><I>pro
  rata</I></FONT><FONT size=2> according to the respective outstanding principal
  amounts of the Revolving Loans then held by the Lenders. Each payment in
  respect of Reimbursement Obligations in respect of any Letter of Credit shall
  be made to the Issuing Lender that issued such Letters of Credit. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Notwithstanding
  anything to the contrary herein, all payments (including prepayments) to be
  made by the Borrower hereunder, whether on account of principal, Reimbursement
  Obligations, interest, fees or otherwise, shall be made without setoff or
  counterclaim and shall be made prior to 1:00&nbsp;P.M., New York City time, on
  the due date thereof to the Administrative Agent, for the account of the
  Lenders or the Issuing Lenders, as applicable, at the Funding Office, in
  Dollars and in immediately available funds. The Administrative Agent shall
  distribute such payments to the Lenders promptly upon receipt in like funds as
  received. If any payment hereunder (other than payments on the Eurodollar
  Loans) becomes due and payable on a day other than a Business Day, such
  payment shall be extended to the next succeeding Business Day. If any payment
  on a Eurodollar Loan becomes due and payable on a day other than a Business
  Day, the maturity thereof shall be extended to the next succeeding Business
  Day unless the result of such extension would be to extend such payment into
  another calendar month, in which event such payment shall be made on the
  immediately preceding Business Day. In the case of any extension of any
  payment of principal pursuant to the preceding two sentences, interest thereon
  shall be payable at the then applicable rate during such extension.
</FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Unless
  the Administrative Agent shall have been notified in writing by any Lender
  prior to a borrowing that such Lender will not make the amount that would
  constitute its share of such borrowing available to the Administrative Agent,
  the Administrative Agent may assume that such Lender is making such amount
  available to the Administrative Agent, and the Administrative Agent may, in
  reliance upon such assumption, make available to the Borrower a corresponding
  amount. If such amount is not made available to the Administrative Agent by
  the required time on the Borrowing Date therefor, such Lender shall pay to the
  Administrative Agent, on demand, such amount with interest thereon, at a rate
  equal to the greater of (i)&nbsp;the Federal Funds Effective Rate and
  (ii)&nbsp;a rate determined by the Administrative Agent in accordance with
  banking industry rules on interbank compensation, for the period until such
  Lender makes such amount immediately available to the Administrative Agent. A
  certificate of the Administrative Agent submitted to any Lender with respect
  to any amounts owing under this paragraph shall be conclusive in the absence
  of manifest error. If such Lender's share of such borrowing is not made
  available to the Administrative Agent by such Lender within three Business
  Days after such Borrowing Date, the Administrative Agent shall also be
  entitled to recover such amount with interest thereon at the rate per annum
  applicable to ABR Loans from the Borrower within 30&nbsp;days after written
  demand therefor. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Unless
  the Administrative Agent shall have been notified in writing by the Borrower
  prior to the date of any payment due to be made by the Borrower hereunder that
  the Borrower will not make such payment to the Administrative Agent, the
  Administrative Agent may assume that the Borrower is making such payment, and
  the Administrative Agent may, but shall not be required to, in reliance upon
  such assumption, make available to the Lenders their respective </FONT><FONT
  size=2><I>pro rata</I></FONT><FONT size=2> shares of a corresponding amount.
  If such payment is not made to the Administrative Agent by the Borrower within
  three Business Days after such due date, the Administrative Agent shall be
  entitled to recover, on demand, from each Lender to which any amount which was
  made available pursuant to the preceding sentence, such amount with interest
  thereon at the rate per annum </FONT></P></UL>
<P align=center><FONT size=2>22</FONT></P>
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name=page_di1542_1_23></A>
<UL><BR>
  <P><FONT size=2>equal to the daily average Federal Funds Effective Rate.
  Nothing herein shall be deemed to limit the rights of the Administrative Agent
  or any Lender against the Borrower. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The
  Borrower agrees that, upon the request to the Administrative Agent by any
  Lender, the Borrower will promptly execute and deliver to such Lender a
  promissory note (a "</FONT><FONT size=2><I>Note</I></FONT><FONT size=2>") of
  the Borrower evidencing any Revolving Loans of such Lender, substantially in
  the form of Exhibit&nbsp;H, with appropriate insertions as to date and
  principal amount; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>,
  that delivery of Notes shall not be a condition precedent to the occurrence of
  the Closing Date or the making of Loans on the Closing Date. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Requirements of Law.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof: </FONT></P>
<UL>
  <UL>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;shall
    subject any Lender to any tax of any kind whatsoever with respect to this
    Agreement, any Letter of Credit, any Application or any Eurodollar Loan made
    by it, or change the basis of taxation of payments to such Lender in respect
    thereof (except for Non-Excluded Taxes and Other Taxes covered by
    Section&nbsp;2.16 and net income taxes and franchise taxes imposed in lieu
    of net income taxes); </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;shall
    impose, modify or hold applicable any reserve, special deposit, compulsory
    loan or similar requirement against assets held by, deposits or other
    liabilities in or for the account of, advances, loans or other extensions of
    credit by, or any other acquisition of funds by, any office of such Lender
    that is not otherwise included in the determination of the Eurodollar Rate,
    which requirements are generally applicable to loans made by such Lender; or
    </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;shall
    impose on such Lender any other condition that is generally applicable to
    loans made by such Lender; </FONT></P></UL></UL>
<P><FONT size=2>and the result of any of the foregoing is to increase the cost
to such Lender, by an amount that such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, within ten Business Days after its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
size=2><I>however</I></FONT><FONT size=2>, that no Lender shall be entitled to
demand such compensation more than 90&nbsp;days following (x)&nbsp;the last day
of the Interest Period in respect of which such demand is made or (y)&nbsp;the
repayment of the Loan or Swingline Loan in respect of which such demand is made,
and no Issuing Lender shall be entitled to demand such compensation more than
90&nbsp;days following the expiration or termination (by drawing or otherwise)
of the Letter of Credit issued by it in respect of which such demand is made.
</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
  any Lender shall have determined that the adoption of or any change in any
  Requirement of Law regarding capital adequacy or in the interpretation or
  application thereof or compliance by such Lender or any corporation
  controlling such Lender with any request or directive regarding capital
  adequacy (whether or not having the force of law) from any Governmental
  Authority made subsequent to the date hereof shall have the effect of reducing
  the rate of return on such Lender's or such corporation's capital as a
  consequence of its obligations hereunder or under or in respect of any Letter
  of Credit to a level below that which such Lender or such corporation could
  have achieved but for such adoption, change or compliance (taking into
  consideration such Lender's or such corporation's policies with respect to
  capital adequacy) by an amount deemed by such Lender to be material, then from
  time to time, after submission by such </FONT></P></UL>
<P align=center><FONT size=2>23</FONT></P>
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name=page_di1542_1_24></A>
<UL>
  <P><FONT size=2>Lender to the Borrower (with a copy to the Administrative
  Agent) of a written request therefor, the Borrower shall pay to such Lender
  such additional amount or amounts as will compensate such Lender or such
  corporation for such reduction. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;A
  certificate as to any additional amounts payable pursuant to this Section
  submitted by any Lender to the Borrower (with a copy to the Administrative
  Agent) shall constitute prima facie evidence of such costs or amounts.
  Notwithstanding anything to the contrary in this Section, the Borrower shall
  not be required to compensate a Lender pursuant to this Section for any
  amounts incurred more than six months prior to the date that such Lender
  notifies the Borrower of such Lender's intention to claim compensation
  therefor; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that, if the
  circumstances giving rise to such claim have a retroactive effect, then such
  six-month period shall be extended to include the period of such retroactive
  effect not to exceed twelve months. The obligations of the Borrower pursuant
  to this Section shall survive for 90&nbsp;days after the termination of this
  Agreement and the payment of the Loans and all other amounts then due and
  payable hereunder. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Taxes.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;All payments made by the Borrower under
this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding (i)&nbsp;net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document) and
(ii)&nbsp;any branch profits tax imposed by the United States. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("</FONT><FONT size=2><I>Non-Excluded Taxes</I></FONT><FONT
size=2>") or Other Taxes are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
size=2><I>however</I></FONT><FONT size=2>, that the Borrower shall not be
required to increase any such amounts payable to any Lender with respect to any
Non-Excluded Taxes (i)&nbsp;that are attributable to such Lender's failure to
comply with the requirements of paragraph&nbsp;(d) or (e)&nbsp;of this Section
or (ii)&nbsp;that are United States withholding taxes imposed on amounts payable
to such Lender at the time such Lender becomes a party to this Agreement, except
to the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;In
  addition, the Borrower shall pay any Other Taxes to the relevant Governmental
  Authority in accordance with applicable law. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Whenever
  any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly
  as possible thereafter the Borrower shall send to the Administrative Agent for
  its own account or for the account of the relevant Lender, as the case may be,
  a certified copy of any original official receipt received by the Borrower
  showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
  or Other Taxes when due to the appropriate taxing authority, the Borrower
  shall indemnify the Administrative Agent and the Lenders for any incremental
  taxes, interest or penalties that may become payable by the Administrative
  Agent or any Lender as a result of any such failure. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Each
  Lender (or Transferee) that is not a "U.S. Person" as defined in
  Section&nbsp;7701(a)(30) of the Code (a "</FONT><FONT size=2><I>Non-U.S.
  Lender</I></FONT><FONT size=2>") shall deliver to the Borrower and the
  Administrative Agent (or, </FONT></P></UL>
<P align=center><FONT size=2>24</FONT></P>
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name=page_di1542_1_25></A>
<UL><BR>
  <P><FONT size=2>in the case of a Participant, to the Lender from which the
  related participation shall have been purchased) two copies of either U.S.
  Internal Revenue Service Form&nbsp;W-8BEN or Form&nbsp;W-8ECI, or, in the case
  of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
  under Section&nbsp;871(h) or 881(c) of the Code with respect to payments of
  "portfolio interest", a statement substantially in the form of Exhibit&nbsp;G
  and a Form&nbsp;W-8BEN, or any subsequent versions thereof or successors
  thereto, properly completed and duly executed by such Non-U.S. Lender claiming
  complete exemption from, or a reduced rate of, U.S. federal withholding tax on
  all payments by the Borrower under this Agreement and the other Loan
  Documents. Such forms shall be delivered by each Non-U.S. Lender on or before
  the date it becomes a party to this Agreement (or, in the case of any
  Participant, on or before the date such Participant purchases the related
  participation). In addition, each Non-U.S. Lender shall deliver such forms
  promptly upon the obsolescence or invalidity of any form previously delivered
  by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the
  Borrower at any time it determines that it is no longer in a position to
  provide any previously delivered certificate to the Borrower (or any other
  form of certification adopted by the U.S. taxing authorities for such
  purpose). Notwithstanding any other provision of this paragraph, a Non-U.S.
  Lender shall not be required to deliver any form pursuant to this paragraph
  that such Non-U.S. Lender is not legally able to deliver; </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
  size=2><I>however</I></FONT><FONT size=2>, if any Non-U.S. Lender fails to
  file forms with the Borrower and the Administrative Agent (or, in the case of
  a Participant, with the Lender from which the related participation was
  purchased) on or before the date the Non-U.S. Lender becomes a party to this
  Agreement (or, in the case of a Participant, on or before the date such
  Participant purchased the related participation) entitling the Non-U.S. Lender
  to a complete exemption from United States withholding taxes at such time,
  such Non-U.S. Lender shall not be entitled to receive any increased payments
  from the Borrower with respect to United States withholding taxes under
  paragraph&nbsp;(a) of this Section, except to the extent that the Non-U.S.
  Lender's assignor (if any) was entitled, at the time of the assignment to the
  Non-U.S. Lender, to receive additional amounts from the Borrower with respect
  to United States withholding taxes. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;A
  Lender that is entitled to an exemption from or reduction of non-U.S.
  withholding tax under the law of the jurisdiction in which the Borrower is
  located, or any treaty to which such jurisdiction is a party, with respect to
  payments under this Agreement shall deliver to the Borrower (with a copy to
  the Administrative Agent), at the time or times prescribed by applicable law
  or reasonably requested by the Borrower, such properly completed and executed
  documentation prescribed by applicable law as will permit such payments to be
  made without withholding or at a reduced rate, </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that such Lender is legally
  entitled to complete, execute and deliver such documentation and in such
  Lender's judgment such completion, execution or submission would not
  materially prejudice the legal position of such Lender. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;If
  the Administrative Agent or any Lender determines, in its sole discretion,
  that it has received a refund of any Non-Excluded Taxes or Other Taxes as to
  which it has been indemnified by the Borrower or with respect to which the
  Borrower has paid amounts pursuant to this Section&nbsp;2.16, it shall pay
  over such refund to the Borrower (but only to the extent of indemnity payments
  made, or additional amounts paid, by the Borrower under this Section&nbsp;2.16
  with respect to the Non-Excluded Taxes or Other Taxes giving rise to such
  refund), net of all out-of-pocket expenses of the Administrative Agent or such
  Lender and without interest (other than any interest paid by the relevant
  Governmental Authority with respect to such refund); </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2>, that the Borrower, upon the
  request of the Administrative Agent or such Lender, agrees to repay the amount
  paid over to the Borrower (</FONT><FONT size=2><I>plus</I></FONT><FONT size=2>
  any penalties, interest or other charges imposed by the relevant Governmental
  Authority) to the Administrative Agent or such Lender in the event the
  Administrative Agent or such Lender is required to repay such refund to such
  Governmental Authority. This paragraph shall not be construed to require the
  Administrative Agent or any </FONT></P></UL>
<P align=center><FONT size=2>25</FONT></P>
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name=page_di1542_1_26></A>
<UL><BR>
  <P><FONT size=2>Lender to make available its tax returns (or any other
  information relating to its taxes which it deems confidential) to the Borrower
  or any other Person. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;The
  agreements in this Section shall survive for one year after the termination of
  this Agreement and the payment of the Loans and all other amounts payable
  hereunder. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnity.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss (other than the loss of
Applicable Margin) or expense that such Lender may sustain or incur as a
consequence of (a)&nbsp;default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b)&nbsp;default by the Borrower in making any prepayment of or
conversion from Eurodollar Loans after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c)&nbsp;the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. A certificate as to any amounts payable pursuant to
this Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive for 90&nbsp;days after
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Change of Lending Office.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section&nbsp;2.15 or 2.16(a) or
(b)&nbsp;with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that such designation is made on
terms that, in the sole but reasonable judgment of such Lender, cause such
Lender and its lending office(s) to suffer no unreimbursed economic
disadvantage, or any legal or regulatory disadvantage, and </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
size=2><I>further</I></FONT><FONT size=2>, that nothing in this Section shall
affect or postpone any of the obligations of the Borrower or the rights of any
Lender pursuant to Section&nbsp;2.15 or 2.16(a). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Replacement of Lenders.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall be permitted to replace any
Lender that (a)&nbsp;requests (on its behalf or any of its Participants)
reimbursement for amounts owing pursuant to Section&nbsp;2.15 or 2.16(a) or
(b)&nbsp;defaults in its obligation to make Loans hereunder, with a replacement
financial institution; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>
that (i)&nbsp;such replacement does not conflict with any Requirement of Law,
(ii)&nbsp;no Event of Default shall have occurred and be continuing at the time
of such replacement, (iii)&nbsp;prior to any such replacement, such Lender shall
have taken no action under Section&nbsp;2.18 which eliminates the continued need
for payment of amounts owing pursuant to Section&nbsp;2.15 or 2.16(a),
(iv)&nbsp;the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Lender on or prior to the date of
replacement, (v)&nbsp;the Borrower shall be liable to such replaced Lender under
Section&nbsp;2.17 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi)&nbsp;the replacement financial institution, if not already a Lender, shall
be reasonably satisfactory to the Administrative Agent, (vii)&nbsp;the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section&nbsp;10.6 (</FONT><FONT size=2><I>provided</I></FONT><FONT
size=2> that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii)&nbsp;until such time as such
replacement shall be consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section&nbsp;2.15 or 2.16(a), as the case may be,
and (ix)&nbsp;any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender. </FONT></P>
<P align=center><FONT size=2>26</FONT></P>
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<P align=center><FONT size=2><A name=page_dk1542_1_27></A></FONT><FONT
size=2><B>SECTION&nbsp;3. LETTERS OF CREDIT </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;L/C Commitment.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Subject
  to the terms and conditions hereof, each Issuing Lender, in reliance on the
  agreements of the other Lenders set forth in Section&nbsp;3.4(a), agrees to
  issue standby letters of credit ("</FONT><FONT size=2><I>Letters of
  Credit</I></FONT><FONT size=2>") for the account of the Borrower on any
  Business Day on or after the Closing Date and during the Commitment Period in
  such form as may be approved from time to time by such Issuing Lender;
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>, that no Issuing
  Lender shall issue, amend, extend or renew any Letter of Credit if, after
  giving effect to such issuance, amendment, extension or renewal (i)&nbsp;the
  L/C Obligations would exceed the L/C Commitment or (ii)&nbsp;the aggregate
  amount of the Available Commitments would be less than zero. Each Letter of
  Credit shall (i)&nbsp;be denominated in Dollars and (ii)&nbsp;expire no later
  than the earlier of (x)&nbsp;the first anniversary of its date of issuance and
  (y)&nbsp;the date which is five Business Days prior to the Termination Date;
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that any Letter of
  Credit with a one-year term may provide for the renewal thereof for additional
  one-year periods (which shall in no event extend beyond the date referred to
  in clause&nbsp;(y) above). </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;No
  Issuing Lender shall at any time be obligated to issue, amend, extend or renew
  any Letter of Credit hereunder if such issuance, amendment, extension or
  renewal would conflict with, or cause such Issuing Lender or any L/C
  Participant to exceed any limits imposed by, any applicable Requirement of
  Law. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure for Issuance of Letters of
Credit.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower may from
time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as such
Issuing Lender may request. Concurrently with the delivery of an Application to
an Issuing Lender, the Borrower shall deliver a copy thereof to the
Administrative Agent. Upon receipt of any Application, an Issuing Lender will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by such Issuing Lender and the Borrower
(but in no event shall any Issuing Lender be required to issue any Letter of
Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto). Promptly after issuance by an Issuing Lender of a
Letter of Credit, such Issuing Lender shall furnish a copy of such Letter of
Credit to the Borrower. Each Issuing Lender shall promptly give notice to the
Administrative Agent of the issuance of each Letter of Credit issued by such
Issuing Lender (including the amount thereof), and shall provide a copy of such
Letter of Credit to the Administrative Agent as soon as possible after the date
of issuance. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Fees and Other Charges.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
  Borrower will pay a fee on the aggregate drawable amount of all outstanding
  Letters of Credit at a per annum rate equal to the Applicable Margin then in
  effect with respect to Eurodollar Loans, shared ratably among the Lenders in
  accordance with their respective Percentages and payable quarterly in arrears
  on each Fee Payment Date after the issuance date. In addition, the Borrower
  shall pay to the relevant Issuing Lender for its own account a fronting fee on
  the aggregate drawable amount of all outstanding Letters of Credit issued in
  an amount to be agreed between the Borrower and such Issuing Lender, payable
  quarterly in arrears on each Fee Payment Date after the issuance date.
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;In
  addition to the foregoing fees, the Borrower shall pay or reimburse each
  Issuing Lender for such normal and customary costs and expenses as are
  incurred or charged by such Issuing Lender in issuing, negotiating, effecting
  payment under, amending, renewing or otherwise administering any Letter of
  Credit. </FONT></P></UL>
<P align=center><FONT size=2>27</FONT></P>
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name=page_dk1542_1_28></A>
<UL><BR></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;L/C Participations.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Each
  Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
  Participant, and, to induce each Issuing Lender to issue Letters of Credit
  hereunder, each L/C Participant irrevocably agrees to accept and purchase and
  hereby accepts and purchases from each Issuing Lender, on the terms and
  conditions hereinafter stated, for such L/C Participant's own account and
  risk, an undivided interest equal to such L/C Participant's Percentage in each
  Issuing Lender's obligations and rights under each Letter of Credit issued by
  such Issuing Lender hereunder and the amount of each draft paid by such
  Issuing Lender thereunder. Each L/C Participant unconditionally and
  irrevocably agrees with each Issuing Lender that, if a draft is paid under any
  Letter of Credit issued by such Issuing Lender for which such Issuing Lender
  is not reimbursed in full by the Borrower in accordance with the terms of this
  Agreement, such L/C Participant shall pay to the Administrative Agent for the
  account of such Issuing Lender upon demand at such Issuing Lender's address
  for notices specified herein (and thereafter the Administrative Agent shall
  promptly pay to such Issuing Lender) an amount equal to such L/C Participant's
  Percentage of the amount of such draft, or any part thereof, that is not so
  reimbursed. Each L/C Participant's obligation to pay such amount shall be
  absolute and unconditional and shall not be affected by any circumstance,
  including (i)&nbsp;any setoff, counterclaim, recoupment, defense or other
  right that such L/C Participant may have against the Issuing Lender, the
  Borrower or any other Person for any reason whatsoever, (ii)&nbsp;the
  occurrence or continuance of a Default or an Event of Default or the failure
  to satisfy any of the other conditions specified in Section&nbsp;5,
  (iii)&nbsp;any adverse change in the condition (financial or otherwise) of the
  Borrower, (iv)&nbsp;any breach of this Agreement or any other Loan Document by
  the Borrower, any other Borrower or any other L/C Participant or (v)&nbsp;any
  other circumstance, happening or event whatsoever, whether or not similar to
  any of the foregoing. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
  any amount (a "</FONT><FONT size=2><I>Participation Amount</I></FONT><FONT
  size=2>") required to be paid by any L/C Participant to an Issuing Lender
  pursuant to Section&nbsp;3.4(a) in respect of any unreimbursed portion of any
  payment made by such Issuing Lender under any Letter of Credit is paid to such
  Issuing Lender within three Business Days after the date such payment is due,
  such Issuing Lender shall so notify the Administrative Agent, which shall
  promptly notify the L/C Participants, and each L/C Participant shall pay to
  the Administrative Agent, for the account of such Issuing Lender, on demand
  (and thereafter the Administrative Agent shall promptly pay to such Issuing
  Lender) an amount equal to the product of (i)&nbsp;such Participation Amount,
  </FONT><FONT size=2><I>times</I></FONT><FONT size=2> (ii)&nbsp;the daily
  average Federal Funds Effective Rate during the period from and including the
  date such payment is required to the date on which such payment is immediately
  available to such Issuing Lender, </FONT><FONT size=2><I>times</I></FONT><FONT
  size=2> (iii)&nbsp;a fraction the numerator of which is the number of days
  that elapse during such period and the denominator of which is 360. If any
  Participation Amount required to be paid by any L/C Participant pursuant to
  Section&nbsp;3.4(a) is not made available to the Administrative Agent for the
  account of the relevant Issuing Lender by such L/C Participant within three
  Business Days after the date such payment is due, the Administrative Agent on
  behalf of such Issuing Lender shall be entitled to recover from such L/C
  Participant, on demand, such Participation Amount with interest thereon
  calculated from such due date at the rate per annum applicable to ABR Loans. A
  certificate of the Administrative Agent submitted on behalf of an Issuing
  Lender to any L/C Participant with respect to any amounts owing under this
  Section shall be conclusive in the absence of manifest error. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Whenever,
  at any time after an Issuing Lender has made payment under any Letter of
  Credit and has received from the Administrative Agent any L/C Participant's
  </FONT><FONT size=2><I>pro rata</I></FONT><FONT size=2> share of such payment
  in accordance with Section&nbsp;3.4(a), such Issuing Lender receives any
  payment related to such Letter of Credit (whether directly from the Borrower
  or otherwise, including proceeds of collateral applied thereto by such Issuing
  Lender), or any payment of interest on account thereof, </FONT></P></UL>
<P align=center><FONT size=2>28</FONT></P>
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name=page_dk1542_1_29></A>
<UL><BR>
  <P><FONT size=2>such Issuing Lender will distribute to the Administrative
  Agent for the account of such L/C Participant (and thereafter the
  Administrative Agent will promptly distribute to such L/C Participant) its
  </FONT><FONT size=2><I>pro rata</I></FONT><FONT size=2> share thereof;
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
  size=2><I>however</I></FONT><FONT size=2>, that in the event that any such
  payment received by such Issuing Lender shall be required to be returned by
  such Issuing Lender, such L/C Participant shall return to the Administrative
  Agent for the account of such Issuing Lender (and thereafter the
  Administrative Agent shall promptly return to such Issuing Lender) the portion
  thereof previously distributed by such Issuing Lender. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reimbursement Obligation of the
Borrower</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower agrees to
reimburse each Issuing Lender on (i)&nbsp;the Business Day on which the Borrower
receives notice from an Issuing Lender of a draft drawn on a Letter of Credit
issued by such Issuing Lender and paid by such Issuing Lender, if such notice is
received on such Business Day prior to 11:00&nbsp;A.M., New York City time, or
(ii)&nbsp;if clause&nbsp;(i) above does not apply, the Business Day immediately
following the day on which the Borrower receives such notice, for the amount of
(a)&nbsp;such draft so paid and (b)&nbsp;any taxes, fees, charges or other costs
or expenses incurred by such Issuing Lender in connection with such payment
which are obligations of the Borrower hereunder (the amounts described in the
foregoing clauses (a)&nbsp;and (b)&nbsp;in respect of any drawing, collectively,
the "</FONT><FONT size=2><I>Payment Amount</I></FONT><FONT size=2>"). Each such
payment shall be made to such Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds. Interest shall be payable on each Payment Amount
from the date of the applicable drawing until payment in full at the rate set
forth in (i)&nbsp;until the second Business Day following the date of the
applicable drawing, Section&nbsp;2.11(b) and (ii)&nbsp;thereafter,
Section&nbsp;2.11(c). Each drawing under any Letter of Credit shall (unless an
event of the type described in clause&nbsp;(i) or (ii)&nbsp;of Section&nbsp;8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section&nbsp;3.4 for funding by L/C
Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section&nbsp;2.1 of ABR Loans
(or, at the option of the Administrative Agent and the Swingline Lender in their
sole discretion, a borrowing pursuant to Section&nbsp;2.4 of Swingline Loans) in
the amount of such drawing. The Borrowing Date with respect to such borrowing
shall be the first date on which a borrowing of Revolving Loans (or, if
applicable, Swingline Loans) could be made, pursuant to Section&nbsp;2.1 (or, if
applicable, Section&nbsp;2.4), if the Administrative Agent had received a notice
of such borrowing at the time the Administrative Agent receives notice from the
relevant Issuing Lender of such drawing under such Letter of Credit. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Obligations Absolute</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower's obligations under this
Section&nbsp;3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person; other than with respect
to any action taken or omitted by an Issuing Lender under or in connection with
any Letter of Credit issued by it or the related drafts or documents found to
constitute gross negligence or willful misconduct or not in accordance with the
standards of care specified in the Uniform Commercial Code of the State of New
York. The Borrower also agrees with each Issuing Lender that such Issuing Lender
shall not be responsible for, and the Borrower's Reimbursement Obligations under
Section&nbsp;3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions which resulted from the gross negligence or
willful misconduct of such Issuing Lender. The Borrower agrees that any action
taken or omitted by an Issuing Lender under or in connection with any Letter of
Credit issued by it or the related drafts or documents, if done in the absence
of gross negligence or willful misconduct and in accordance with the </FONT></P>
<P align=center><FONT size=2>29</FONT></P>
<HR noShade>

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name=page_dk1542_1_30></A><BR>
<P><FONT size=2>standards or care specified in the Uniform Commercial Code of
the State of New York, shall be binding on the Borrower and shall not result in
any liability of such Issuing Lender to the Borrower. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Letter of Credit Payments</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;If any draft shall be presented for payment under
any Letter of Credit, the relevant Issuing Lender shall promptly notify the
Borrower and the Administrative Agent of the date and amount thereof. The
responsibility of the relevant Issuing Lender to the Borrower in connection with
any draft presented for payment under any Letter of Credit, in addition to any
payment obligation expressly provided for in such Letter of Credit issued by
such Issuing Lender, shall be limited, in the absence of gross negligence or
willful misconduct or failure to act in accordance with the standards of care
specified in the Uniform Commercial Code of the State of New York, to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment appear on their face to be
in conformity with such Letter of Credit. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Applications</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section&nbsp;3, the provisions of this Section&nbsp;3 shall apply.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Actions of Issuing Lenders</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Issuing Lender shall be entitled to rely,
and shall be fully protected in relying, upon any draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by such Issuing Lender. Each
Issuing Lender shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any other
provision of this Section, as between the Issuing Lenders and the Lenders, each
Issuing Lender shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lenders and any future holders of a
participation in any Letter of Credit. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Borrower's Indemnification</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower hereby agrees to indemnify and hold
harmless each Lender, each Issuing Lender and the Administrative Agent, and
their respective directors, officers, agents and employees from and against any
and all claims and damages, losses, liabilities, costs or expenses which such
Lender, such Issuing Lender or the Administrative Agent may incur (or which may
be claimed against such Lender, such Issuing Lender or the Administrative Agent
by any Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay under any
Letter of Credit or any actual or proposed use of any Letter of Credit,
including, without limitation, any claims, damages, losses, liabilities, costs
or expenses which such Issuing Lender may incur by reason of or in connection
with (i)&nbsp;the failure of any other Lender to fulfill or comply with its
obligations to an Issuing Lender hereunder (but nothing herein contained shall
affect any rights the Borrower may have against any defaulting Lender) or
(ii)&nbsp;by reason of or on account of an Issuing Lender issuing any Letter of
Credit which specifies that the term "Beneficiary" included therein includes any
successor by operation of law of the named Beneficiary, but which Letter of
Credit does not require that any drawing by any such successor Beneficiary be
accompanied by a copy of a legal document, satisfactory to such Issuing Lender,
evidencing the appointment of such successor Beneficiary; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2> that the Borrower shall not be
required to indemnify any Lender, any Issuing Lender or the Administrative Agent
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (x)&nbsp;the willful misconduct or gross
negligence of such Issuing Lender in determining whether a request presented
under any Letter of Credit complied with the terms of such Letter of Credit and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York or (y)&nbsp;such Issuing Lender's failure to pay
under </FONT></P>
<P align=center><FONT size=2>30</FONT></P>
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<P><FONT size=2>any Letter of Credit after the presentation to it of a request
strictly complying with the terms and conditions of such Letter of Credit.
Nothing in this Section is intended to limit the obligations of the Borrower
under any other provision of this Agreement. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Lenders' Indemnification.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender shall, ratably in accordance with its
Percentage, indemnify each Issuing Lender, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such indemnitees' gross negligence or willful misconduct or failure to
comply with the standard of care specified in the Uniform Commercial Code of the
State of New York or such Issuing Lender's failure to pay under any Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of the Letter of Credit) that such indemnitees may suffer
or incur in connection with this Section or any action taken or omitted by such
indemnitees hereunder. </FONT></P>
<P align=center><FONT size=2><B>SECTION&nbsp;4. REPRESENTATIONS AND WARRANTIES
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To induce the
Administrative Agent and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby
represents and warrants to the Administrative Agent and each Lender, on the date
hereof, on the Closing Date and on the date of each Loan and each issuance or
extension of a Letter of Credit hereunder after the Closing Date, that:
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Financial Condition.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The audited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as of December&nbsp;31, 2001,
December&nbsp;31, 2002 and December&nbsp;31, 2003, and the related consolidated
statements of operations and cash flows for the fiscal years ended on such
dates, reported on by Deloitte&nbsp;&amp; Touche LLP, present fairly in all
material respects the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as of such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at September&nbsp;30, 2004, and the related
unaudited consolidated statements of income and cash flows for the nine-month
period ended on such date, present fairly, in all material respects, the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the nine-month period then ended (subject to
normal year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved. Except as disclosed in the
Specified Exchange Act Filings, neither the Borrower nor any of its consolidated
Subsidiaries has as of the Closing Date any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
forward or long-term commitments outside of the ordinary course of business,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Change.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Since December&nbsp;31, 2003, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect, except as disclosed in the Specified Exchange Act
Filings. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Existence; Compliance with
Law.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Borrower and its
Significant Subsidiaries (a)&nbsp;is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, (b)&nbsp;has
the corporate power and corporate authority to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c)&nbsp;is duly qualified as a foreign corporation or
other organization and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except to the extent that the failure to so
qualify could not reasonably be expected to </FONT></P>
<P align=center><FONT size=2>31</FONT></P>
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<P><FONT size=2>have a Material Adverse Effect and (d)&nbsp;is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Power; Authorization; Enforceable
Obligations.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower has the
corporate power and corporate authority to make, deliver and perform the Loan
Documents and to obtain extensions of credit hereunder. The Borrower has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents and to authorize the extensions of credit on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except consents,
authorizations, filings and notices which have been obtained or made and are in
full force and effect. This Agreement has been, and each other Loan Document
upon execution and delivery will be, duly executed and delivered. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, except as enforceability may be limited
by (x)&nbsp;applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally, laws of
general application related to the enforceability of securities secured by real
estate and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and (y)&nbsp;applicable regulatory
requirements. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Legal Bar.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate in any
material respect any Requirement of Law or any Contractual Obligation of the
Borrower or any of its Significant Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation. No Requirement of Law or Contractual Obligation
applicable to the Borrower or any of its Significant Subsidiaries is reasonably
likely to have a Material Adverse Effect. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Litigation.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened in writing by or against the
Borrower or any of its Significant Subsidiaries or against any of their material
respective properties or revenues with respect to any of the Loan Documents.
</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;No
  litigation, investigation or proceeding of or before any arbitrator or
  Governmental Authority is pending or, to the knowledge of the Borrower,
  threatened in writing by or against the Borrower or any of its Significant
  Subsidiaries or against any of their material respective properties or
  revenues, except as disclosed in the Specified Exchange Act Filings, that
  could reasonably be expected to have a Material Adverse Effect. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Default.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither the Borrower nor any of its Significant
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Taxes.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower and each of its Significant
Subsidiaries has filed or caused to be filed all Federal and state returns of
income and franchise taxes imposed in lieu of net income taxes and all other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or with respect to any claims or
assessments for taxes made against it or any of its property by any Governmental
Authority (other than (i)&nbsp;any amounts the validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Borrower or any of its Significant Subsidiaries, as applicable and
(ii)&nbsp;claims which could not reasonably be expected to have a Material
</FONT></P>
<P align=center><FONT size=2>32</FONT></P>
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<P><FONT size=2>Adverse Effect). No tax Liens have been filed against the
Borrower or any of its Significant Subsidiaries other than (A)&nbsp;Liens for
taxes which are not delinquent or (B)&nbsp;Liens for taxes which are being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or any of its Significant Subsidiaries, as applicable. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Federal Regulations.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation&nbsp;U as now and from time to time hereafter in effect or for
any purpose that violates the provisions of the Regulations of the Board.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;ERISA.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither a Reportable Event (other than the
Post-event Notices of Reportable Events filed with the PBGC on May&nbsp;2, 2001,
in respect of the April&nbsp;6, 2001, bankruptcy filing of PG&amp;E Utility and
on July&nbsp;16, 2003, in respect of the July&nbsp;8, 2003, bankruptcy filing of
National Energy&nbsp;&amp; Gas Transmission) nor an "accumulated funding
deficiency" (within the meaning of Section&nbsp;412 of the Code or
Section&nbsp;302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Investment Company Act; Other
Regulations.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. On the
date hereof, the Borrower is not subject to regulation under any Requirement of
Law (other than Regulation&nbsp;X of the Board) that limits its ability to incur
Indebtedness under this Agreement. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Use of Proceeds.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The proceeds of the Revolving Loans and the
Swingline Loans and the Letters of Credit shall be used (i)&nbsp;for working
capital purposes and (ii)&nbsp;for general corporate purposes. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Environmental Matters.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as (i)&nbsp;disclosed in the Specified
Exchange Act Filings or (ii)&nbsp;in the aggregate, could not reasonably be
expected to have a Material Adverse Effect: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
  facilities and properties owned, leased or operated by the Borrower and its
  Significant Subsidiaries (the "</FONT><FONT
  size=2><I>Properties</I></FONT><FONT size=2>") do not contain, and, to the
  Borrower's knowledge, have not previously contained, any Materials of
  Environmental Concern in amounts or concentrations or under circumstances that
  constitute or constituted a violation of, or, to the Borrower's knowledge,
  would give rise to liability under, any Environmental Law; </FONT></P></UL>
<P align=center><FONT size=2>33</FONT></P>
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<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;neither
  the Borrower nor any of its Significant Subsidiaries has received or is aware
  of any notice of violation, alleged violation, non-compliance, liability or
  potential liability regarding environmental matters or compliance with
  Environmental Laws with regard to any of the Properties or the business
  operated by the Borrower and its Significant Subsidiaries (the "</FONT><FONT
  size=2><I>Business</I></FONT><FONT size=2>"), nor does the Borrower have
  knowledge or reason to believe that any such notice will be received or is
  being threatened; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Materials
  of Environmental Concern have not been transported or disposed of from the
  Properties in violation of, or in a manner or to a location that, to the
  Borrower's knowledge, would give rise to liability under, any Environmental
  Law, nor have any Materials of Environmental Concern been generated, treated,
  stored or disposed of at, on or under any of the Properties in violation of,
  or in a manner that, to the Borrower's knowledge, would give rise to liability
  under, any applicable Environmental Law; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;no
  judicial proceeding or governmental or administrative action is pending or, to
  the knowledge of the Borrower, threatened, under any Environmental Law to
  which the Borrower or any of its Significant Subsidiaries is or will be named
  as a party with respect to the Properties or the Business, nor are there any
  consent decrees or other decrees, consent orders, administrative orders or
  other orders, or other administrative or judicial requirements outstanding
  under any Environmental Law with respect to the Properties or the Business;
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;there
  has been no release or threat of release of Materials of Environmental Concern
  at or from the Properties, or arising from or related to the operations of the
  Borrower or any of its Significant Subsidiaries in connection with the
  Properties or otherwise in connection with the Business, in violation of or in
  amounts or in a manner that, to the Borrower's knowledge, would give rise to
  liability under Environmental Laws; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;the
  Properties and all operations at the Properties are in compliance, and have in
  the last five years been in compliance, with all applicable Environmental
  Laws, and there is no contamination at, under or about the Properties or
  violation of any Environmental Law with respect to the Properties or the
  Business; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;neither
  the Borrower nor any of its Significant Subsidiaries has assumed any liability
  of any other Person under Environmental Laws. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Accuracy of Information, etc.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;No statement or information (other than
projections, parent-only financial statements and </FONT><FONT size=2><I>pro
forma</I></FONT><FONT size=2> information) contained in this Agreement, any
other Loan Document, the Confidential Information Memorandum or any other
document, certificate or statement furnished by or on behalf of the Borrower to
the Administrative Agent or the Lenders, or any of them, for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, contained as of the date such statement, information, document or
certificate was so furnished (or, in the case of the Confidential Information
Memorandum, as of the date of this Agreement), any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading when taken as a whole. The
projections, parent-only financial statements and </FONT><FONT size=2><I>pro
forma</I></FONT><FONT size=2> financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to the Borrower that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum (including any attachments
thereto) or in any other documents, certificates and statements furnished to the
</FONT></P>
<P align=center><FONT size=2>34</FONT></P>
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name=page_dm1542_1_35></A>
<P><FONT size=2>Administrative Agent and the Lenders for use in connection with
the transactions contemplated hereby and by the other Loan Documents.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Regulatory Matters.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower is a "holding company" exempt from
all provisions of PUHCA (except for Section&nbsp;9(a)(2) thereof) pursuant to
Section&nbsp;3(a)(i)&nbsp;thereof and Rule&nbsp;2 thereunder. Solely by virtue
of the execution, delivery and performance of, or the consummation of the
transactions contemplated by this Agreement, no Lender shall be or become
subject to regulation&nbsp;(i) as a "holding company," or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company," within the
meaning of PUHCA, (ii)&nbsp;under the FPA or (iii)&nbsp;as a "public utility" or
"public service corporation" or the equivalent under any Requirement of Law.
</FONT></P>
<P align=center><FONT size=2><B>SECTION&nbsp;5. CONDITIONS PRECEDENT
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Conditions to the Closing
Date.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The occurrence of the
Closing Date is subject to the satisfaction of the following conditions
precedent: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Credit Agreement.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall have received
  this Agreement, executed and delivered by the Administrative Agent, the
  Borrower and each Person listed on </FONT><FONT
  size=2><I>Schedule&nbsp;1.1A</I></FONT><FONT size=2>. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Lenders shall have received the financial
  statements described in Section&nbsp;4.1. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consents and Approvals.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;All governmental and third party consents and
  approvals necessary in connection with this Agreement and the other Loan
  Documents and the transactions contemplated hereby shall have been obtained
  and be in full force and effect; and the Administrative Agent shall have
  received a certificate of a Responsible Officer to the foregoing effect.
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Fees.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Lenders and the Administrative Agent shall
  have received all fees required to be paid, and all expenses for which
  invoices have been presented (including the reasonable fees and expenses of
  legal counsel), on or before the Closing Date. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Closing Certificate; Certified Articles of
  Incorporation; Good Standing Certificates.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall have received
  (i)&nbsp;a certificate of the Borrower, dated the Closing Date, substantially
  in the form of Exhibit&nbsp;D, with appropriate insertions and attachments,
  including the articles of incorporation of the Borrower certified by the
  Secretary of State of the State of California, and (ii)&nbsp;a good standing
  certificate for the Borrower from the Secretary of State of the State of
  California; such closing certificate shall contain a confirmation by the
  Borrower that the conditions precedent set forth in this Section&nbsp;5.1 have
  been satisfied. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Legal Opinions.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall have received
  the following executed legal opinions: </FONT></P>
  <UL>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;the
    legal opinion of Orrick, Herrington&nbsp;&amp; Sutcliffe LLP, counsel to the
    Borrower, substantially in the form of Exhibit&nbsp;F-1; and </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;the
    legal opinion of Bruce R. Worthington, Esq., General Counsel of the
    Borrower, substantially in the form of Exhibit&nbsp;F-2. </FONT></P></UL>
  <P><FONT size=2>Each such legal opinion shall cover such other matters
  incident to the transactions contemplated by this Agreement as the
  Administrative Agent may reasonably require. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Representations and
  Warranties.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the
  representations and warranties made by the Borrower in this Agreement that
  does not contain a materiality qualification shall be true and correct in all
  material respects on and as of the Closing Date, and each of the
  representations and warranties made by the Borrower in this Agreement that
  contains a materiality qualification shall </FONT></P></UL>
<P align=center><FONT size=2>35</FONT></P>
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name=page_dm1542_1_36></A>
<UL><BR>
  <P><FONT size=2>be true and correct on and as of such the Closing Date (or, to
  the extent such representations and warranties specifically relate to an
  earlier date, that such representations and warranties were true and correct
  in all material respects, or true and correct, as the case may be, as of such
  earlier date). </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Default.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;No Default or Event of Default shall have
  occurred and be continuing. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Conditions to Each Extension of
Credit.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The agreement of each
Lender to make any Loan or to issue or extend the expiry date under, or
participate in, a Letter of Credit, on any date is subject to the satisfaction
of the following conditions precedent: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Satisfaction of Conditions Precedent in
  Section&nbsp;5.1.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The
  conditions set precedent set forth in Section&nbsp;5.1 shall have been
  satisfied or waived in accordance with this Agreement as of the Closing Date.
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Representations and
  Warranties.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the
  representations and warranties made by the Borrower in this Agreement that
  does not contain a materiality qualification shall be true and correct in all
  material respects on and as of the date of such extension of credit as if made
  on and as of such date, and each of the representations and warranties made by
  the Borrower in this Agreement that contains a materiality qualification shall
  be true and correct on and as of such date (or, to the extent such
  representations and warranties specifically relate to an earlier date, that
  such representations were true and correct in all material respects, or true
  and correct, as the case may be, as of such earlier date). </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
  size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Default.</I></FONT><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;No Default or Event of Default shall have
  occurred and be continuing on the date of such extension of credit or after
  giving effect to the extensions of credit requested to be made on such date.
  </FONT></P></UL>
<P><FONT size=2>Each borrowing of Loans hereunder, and each request by the
Borrower for the issuance of, or extension of an expiry date under, a Letter of
Credit hereunder shall constitute a representation and warranty by the Borrower
as of the date of such extension of credit that the conditions contained in this
Section&nbsp;5.2 have been satisfied. </FONT></P>
<P align=center><FONT size=2><B>SECTION&nbsp;6. AFFIRMATIVE COVENANTS
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Borrower
hereby agrees that, so long as the Commitments remain in effect, or any Letter
of Credit, any Loan, any interest on any Loan or any fee payable to any Lender
or the Administrative Agent hereunder remains outstanding, or any other amount
then due and payable is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall and, except with respect to Sections 6.1, 6.2,
6.6(b) and 6.7, shall cause its Significant Subsidiaries to: </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Furnish to the Administrative Agent with a copy
for each Lender, and the Administrative Agent shall deliver to each Lender:
</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;as
  soon as available, but in any event within 120&nbsp;days after the end of each
  fiscal year of the Borrower, a copy of the audited consolidated balance sheet
  of the Borrower and its consolidated Subsidiaries as at the end of such year
  and the related audited consolidated statements of operations and cash flows
  for such year, setting forth in each case in comparative form the figures for
  the previous year, reported on without a "going concern" or like qualification
  or exception, or qualification arising out of the scope of the audit, by
  Deloitte&nbsp;&amp; Touche LLP or other independent certified public
  accountants of nationally recognized standing; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;as
  soon as available, but in any event not later than 60&nbsp;days after the end
  of each of the first three quarterly periods of each fiscal year of the
  Borrower, the unaudited consolidated balance sheet of the Borrower and its
  consolidated Subsidiaries as at the end of such quarter and the related
  unaudited consolidated statements of operations and cash flows for such
  quarter and </FONT></P></UL>
<P align=center><FONT size=2>36</FONT></P>
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name=page_dm1542_1_37></A>
<UL><BR>
  <P><FONT size=2>the portion of the fiscal year through the end of such
  quarter, setting forth in each case in comparative form the figures for the
  previous year, certified by a Responsible Officer as being fairly stated in
  all material respects (subject to normal year-end audit adjustments).
  </FONT></P></UL>
<P><FONT size=2>All such financial statements shall be complete and correct in
all material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied (except as approved by such accountants or officer,
as the case may be, and disclosed in reasonable detail therein) consistently
throughout the periods reflected therein and with prior periods. The Borrower
shall be deemed to have delivered the financial statements required to be
delivered pursuant to this Section&nbsp;6.1 upon the filing of such financial
statements by the Borrower through the SEC's EDGAR system or the publication by
the Borrower of such financial statements on its website. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Certificates; Other
Information.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Furnish to the
Administrative Agent with a copy for each Lender (or, in the case of
clause&nbsp;(c), the relevant Lender), and the Administrative Agent shall
deliver to each Lender: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;within
  two days after the delivery of any financial statements pursuant to
  Section&nbsp;6.1, (i)&nbsp;a certificate of a Responsible Officer stating that
  such Responsible Officer has obtained no knowledge of any Default or Event of
  Default except as specified in such certificate and (ii)&nbsp;in the case of
  quarterly or annual financial statements, a Compliance Certificate,
  substantially in the form of Exhibit&nbsp;C, containing all information and
  calculations reasonably necessary for determining compliance by the Borrower
  with the provisions of this Agreement referred to therein as of the last day
  of the fiscal quarter or fiscal year of the Borrower, as the case may be;
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;within
  five days after the same are sent, copies of all financial statements and
  reports that the Borrower sends to the holders of any class of its debt
  securities or public equity securities and, within five days after the same
  are filed, copies of all financial statements and reports that the Borrower
  may make to, or file with, the SEC, </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that, such financial statements and
  reports shall be deemed to have delivered upon the filing of such financial
  statements and reports by the Borrower through the SEC's EDGAR system or
  publication by the Borrower of such financial statements and reports on its
  website; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;promptly,
  such additional financial and other information as any Lender, through the
  Administrative Agent, may from time to time reasonably request. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Payment of Taxes.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Pay all taxes due and payable or any other tax
assessments made against the Borrower or any of its Significant Subsidiaries or
any of their respective property by any Governmental Authority (other than
(i)&nbsp;any amounts the validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Borrower or any of
its Significant Subsidiaries, as applicable or (ii)&nbsp;where the failure to
effect such payment could not reasonably be expected to have a Material Adverse
Effect). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Maintenance of Existence;
Compliance.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)(i)&nbsp;Preserve,
renew and keep in full force and effect its organizational existence,
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that the foregoing shall
not prohibit any merger, consolidation or amalgamation permitted under
Section&nbsp;7.4 and (ii)&nbsp;take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by
Section&nbsp;7.4 and except, in the case of clause&nbsp;(ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (b)&nbsp;comply with all Contractual Obligations and
Requirements of Law except for any such Contractual Obligations or Requirements
of Law being contested in good faith by appropriate proceedings and except to
the extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. </FONT></P>
<P align=center><FONT size=2>37</FONT></P>
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name=page_dm1542_1_38></A><BR>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Maintenance of Property;
Insurance.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted, except to the extent that failure to
do so could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, and (b)&nbsp;maintain with financially sound and reputable
insurance companies insurance on all its material property in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar business of
comparable size and financial strength and owning similar properties in the same
general areas in which the Borrower or the applicable Significant Subsidiary
operates, which may include self-insurance, if determined by the Borrower or the
applicable Significant Subsidiary to be reasonably prudent. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Inspection of Property; Books and Records;
Discussions.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b)&nbsp;unless
a Default or Event of Default has occurred and is continuing, not more than once
a year and after at least five Business Days' notice, (i)&nbsp;permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time to discuss the business, operations, properties and financial and other
condition of the Borrower and its Significant Subsidiaries with officers and
employees of the Borrower and its Significant Subsidiaries and (ii)&nbsp;use
commercially reasonable efforts to provide for the Lenders (in the presence of
representatives of the Borrower) to meet with the independent certified public
accountants of the Borrower and its Subsidiaries; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that any such visits or inspections
shall be subject to such conditions as the Borrower and each of its Significant
Subsidiaries shall deem necessary based on reasonable considerations of safety
and security; and </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>,
</FONT><FONT size=2><I>further</I></FONT><FONT size=2>, that neither the
Borrower nor any Significant Subsidiary shall be required to disclose to any
Lender or its agents or representatives any information which is subject to the
attorney-client privilege or attorney work-product privilege properly asserted
by the applicable Person to prevent the loss of such privilege in connection
with such information or which is prevented from disclosure pursuant to a
confidentiality agreement with third parties. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Promptly give notice to the Administrative Agent
with a copy for each Lender of, and the Administrative Agent shall deliver such
notice to each Lender: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
  occurrence of any Default or Event of Default; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;any
  litigation or proceeding or, to the knowledge of the Borrower, any
  investigation that, in each case, may exist at any time between the Borrower
  or any of its Significant Subsidiaries and any Governmental Authority,
  including environmental proceedings, that, if adversely determined, could
  reasonably be expected to have a Material Adverse Effect; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;any
  change in the Rating issued by either S&amp;P or Moody's; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;any
  litigation or proceeding to which the Borrower or any of its Significant
  Subsidiaries is a party (i)&nbsp;the primary purpose of which is to challenge
  the legality, validity or enforceability of the Loan Documents or
  (ii)&nbsp;seeks to prohibit the ownership or operation by the Borrower or any
  of its Significant Subsidiaries of all or a material portion of their
  respective businesses or assets; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;the
  following events, as soon as possible and in any event within 30&nbsp;days
  after the Borrower knows thereof: (i)&nbsp;the occurrence of any Reportable
  Event with respect to any Plan, a failure to make any required contribution to
  a Plan, the creation of any Lien in favor of the PBGC or a Plan or any
  withdrawal from, or the termination, Reorganization or Insolvency of, any
  Multiemployer Plan or (ii)&nbsp;the institution of proceedings or the taking
  of any other action by the PBGC or the Borrower or any Commonly Controlled
  Entity or any Multiemployer Plan with respect to the withdrawal from, or the
  termination, Reorganization or Insolvency of, any Plan; and </FONT></P></UL>
<P align=center><FONT size=2>38</FONT></P>
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<P><FONT size=2><A name=page_do1542_1_39></A></FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;any
  development or event (other than any litigation or proceeding) that has had or
  could reasonably be expected to have a Material Adverse Effect. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Maintenance of Licenses, etc.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Maintain in full force and effect any
authorization, consent, license or approval of any Governmental Authority
necessary for the conduct of the business of the Borrower or any Significant
Subsidiary as now conducted by it or necessary in connection with this
Agreement, except to the extent the failure to do so could not reasonably be
expected to have a Material Adverse Effect. </FONT></P>
<P align=center><FONT size=2><B>SECTION&nbsp;7. NEGATIVE COVENANTS
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Borrower
hereby agrees that, so long as the Commitments remain in effect, or any Letter
of Credit, any Loan, or any interest on any Loan or any fee payable to any
Lender or the Administrative Agent hereunder remains outstanding, or any other
amount then due and payable is owing to any Lender or the Administrative Agent
hereunder, the Borrower shall not: </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Capitalization
Ratio.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Permit the Consolidated
Capitalization Ratio on the last day of any fiscal quarter, from and after the
last day of the first fiscal quarter ending after the Closing Date, to exceed
0.65 to 1.0. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Prior to the Dividend Commencement Date,
create, incur, assume or suffer to exist Specified Indebtedness in an aggregate
principal amount at any time outstanding exceeding $1,500,000,000; or
(b)&nbsp;permit any Borrower Ownership Subsidiary or any Subsidiary of the
Borrower that directly or indirectly owns stock of a Borrower Ownership
Subsidiary to create, incur, assume or suffer to exist any Indebtedness (other
than Guarantee Obligations in respect of Indebtedness of the Borrower permitted
hereby, so long as such Indebtedness or Guarantee Obligations are secured by a
Lien permitted by Section&nbsp;7.5(d)). </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Liens.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Create, incur, assume or suffer to exist any Lien
upon any assets of the Borrower, whether now owned or hereafter acquired,
except: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Liens
  for taxes, assessments or utility or governmental charges that are not yet due
  and payable or that are being contested in good faith by appropriate
  proceedings, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that
  adequate reserves with respect thereto are maintained on the books of the
  Borrower in conformity with GAAP; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;statutory
  Liens of landlords or equipment lessors against any property of the Borrower,
  carriers', warehousemen's, mechanics', materialmen's, repairmen's or other
  like Liens arising in the ordinary course of business that are not overdue for
  a period of more than 30&nbsp;days or that are being contested in good faith
  by appropriate proceedings; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;pledges
  or deposits in connection with workers' compensation, unemployment insurance,
  pension and other social security laws or regulations; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;deposits
  to secure the performance of bids, trade contracts (other than for borrowed
  money), leases, statutory obligations, surety and appeal bonds, performance
  bonds and other obligations of a like nature incurred in the ordinary course
  of business; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;easements,
  rights-of-way, restrictions (including zoning restrictions), minor defects or
  irregularities in title and other similar charges or encumbrances imposed by
  law or arising in the ordinary course of business that do not in any case
  materially detract from the value of the property subject thereto or
  materially interfere with the ordinary conduct of the business of the
  Borrower; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Liens
  in favor of collecting or payor banks having a right of setoff, revocation,
  refund or chargeback with respect to money or instruments of the Borrower on
  deposit with such bank; </FONT></P></UL>
<P align=center><FONT size=2>39</FONT></P>
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name=page_do1542_1_40></A>
<UL><BR>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;judgment
  and attachment Liens not giving rise to an Event of Default under
  Section&nbsp;8(h) or Liens (not constituting a judgment or attachment Lien
  giving rise to an Event of Default under Section&nbsp;8(h)) created by or
  existing from any litigation or legal proceeding that is being contested in
  good faith by appropriate proceedings; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;Liens
  securing Indebtedness incurred to finance the purchase, lease, improvement or
  construction of capital assets, </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that (A)&nbsp;any such Lien shall
  extend solely to the item or items of such property (or improvement thereon)
  so purchased, leased, improved or constructed, and (B)&nbsp;any such Lien
  shall be created contemporaneously with, or within 90&nbsp;days after, the
  purchase, lease, improvement or construction of such property; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Liens
  existing on assets of a Person immediately prior to its being consolidated
  with or merged into the Borrower, or any Liens existing on any assets acquired
  by the Borrower at the time such assets are so acquired (whether or not the
  Indebtedness or other obligations secured thereby shall have been assumed),
  provided that (A)&nbsp;no such Lien shall have been created in contemplation
  of such consolidation or merger or such acquisition of assets, and (B)&nbsp;no
  such Lien shall extend to any other assets of the Borrower; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Liens
  on Capital Stock of PG&amp;E Utility that do not violate Section&nbsp;7.5(d).
  </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Fundamental Changes.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that the Borrower may be merged, consolidated or
amalgamated with another Person so long as, after giving effect to such merger,
consolidation or amalgamation, (a)&nbsp;no Default or Event of Default shall
have occurred and be continuing, (b)&nbsp;either (i)&nbsp;the Borrower is the
continuing or surviving corporation of such merger, consolidation or
amalgamation or (ii)&nbsp;the continuing or surviving corporation of such
merger, consolidation or amalgamation, if not the Borrower, shall have assumed
all obligations of the Borrower under the Loan Documents pursuant to
arrangements reasonably satisfactory to the Administrative Agent and
(c)&nbsp;the ratings by Moody's and S&amp;P of the continuing or surviving
corporation's senior, unsecured, non-credit enhanced debt shall be at least the
higher of (1)&nbsp;Baa3 from Moody's </FONT><FONT size=2><I>and</I></FONT><FONT
size=2> BBB- from S&amp;P and (2)&nbsp;the ratings by such rating agencies of
the Borrower's senior, unsecured, non-credit enhanced debt in effect before the
earlier of the occurrence or the public announcement of such event. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Ownership of PG&amp;E Utility Common
Stock.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Permit any of the
following to occur: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;ownership
  by the Borrower, at any time, either directly, or indirectly through one or
  more Borrower Ownership Subsidiaries, of less than 60% of the outstanding
  common stock of PG&amp;E Utility and less than or equal to 50% of the voting
  stock of PG&amp;E Utility; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;ownership
  by the Borrower, at any time, either directly, or indirectly through one or
  more Borrower Ownership Subsidiaries or PG&amp;E Utility Ownership
  Subsidiaries, of less than 80% of the outstanding common stock of PG&amp;E
  Utility and less than 70% of the outstanding voting stock of PG&amp;E Utility;
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;ownership
  by PG&amp;E Utility and its Subsidiaries, at any time, of less than or equal
  to 20% of the outstanding common stock of PG&amp;E Utility; or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;any
  stock of PG&amp;E Utility owned by the Borrower or any Borrower Ownership
  Subsidiary, or any stock of a Borrower Ownership Subsidiary or of any
  Subsidiary of the Borrower that directly or indirectly owns stock of a
  Borrower Ownership Subsidiary, to be encumbered by any Lien, other than any
  Lien which secures equally and ratably (i)&nbsp;the Obligations and
  (ii)&nbsp;Indebtedness in an aggregate principal amount not exceeding
  $2,000,000,000. </FONT></P></UL>
<P align=center><FONT size=2>40</FONT></P>
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name=page_do1542_1_41></A>
<UL><BR></UL>
<P align=center><FONT size=2><B>SECTION&nbsp;8. EVENTS OF DEFAULT
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the
following events shall occur and be continuing on or after the Closing Date:
</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
  Borrower shall fail to pay any principal of any Loan or Reimbursement
  Obligation when due in accordance with the terms hereof; or the Borrower shall
  fail to pay any interest on any Loan or Reimbursement Obligation, or any other
  amount payable hereunder or under any other Loan Document, within five
  Business Days after any such interest or other amount becomes due in
  accordance with the terms hereof; or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;any
  representation or warranty made or deemed made by the Borrower herein or in
  any other Loan Document or that is contained in any certificate, document or
  financial or other statement furnished by it at any time under or in
  connection with this Agreement or any such other Loan Document shall prove to
  have been inaccurate in any material respect on or as of the date made or
  deemed made, unless, as of any date of determination, the facts or
  circumstances to which such representation or warranty relates have changed
  with the result that such representation or warranty is true and correct in
  all material respects on such date; or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;the
  Borrower shall default in the observance or performance of any agreement
  contained in clause&nbsp;(i) of Section&nbsp;6.4(a), Section&nbsp;6.7(a),
  Section&nbsp;6.8 or Section&nbsp;7 of this Agreement; or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;the
  Borrower shall default in the observance or performance of any other agreement
  contained in this Agreement or any other Loan Document (other than as provided
  in paragraphs (a)&nbsp;through (c)&nbsp;of this Section), and such default
  shall continue unremedied for a period of 30&nbsp;days after notice to the
  Borrower from the Required Lenders; or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;the
  Borrower or any of its Significant Subsidiaries shall (i)&nbsp;default in
  making any payment of any principal of any Indebtedness (including any
  Guarantee Obligation, but excluding the Loans) on the due date with respect
  thereto (after giving effect to any period of grace, if any, provided in the
  instrument or agreement under which such Indebtedness was created); or
  (ii)&nbsp;default in making any payment of any interest on any such
  Indebtedness beyond the period of grace, if any, provided in the instrument or
  agreement under which such Indebtedness was created; or (iii)&nbsp;default in
  the observance or performance of any other agreement or condition relating to
  any such Indebtedness or contained in any instrument or agreement evidencing,
  securing or relating thereto, or any other event shall occur or condition
  exist, the effect of which default or other event or condition is to cause, or
  (in the case of all Indebtedness other than Indebtedness under any Swap
  Agreement) to permit the holder or beneficiary of such Indebtedness (or a
  trustee or agent on behalf of such holder or beneficiary) to cause, with the
  giving of notice if required, such Indebtedness to become due prior to its
  stated maturity or (in the case of any such Indebtedness constituting a
  Guarantee Obligation) to become payable; </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2>, that a default, event or condition
  described in clause&nbsp;(i), (ii)&nbsp;or (iii)&nbsp;of this
  paragraph&nbsp;(e) shall not at any time constitute an Event of Default
  unless, at such time, one or more defaults, events or conditions of the type
  described in clauses (i), (ii)&nbsp;and (iii)&nbsp;of this paragraph&nbsp;(e)
  shall have occurred and be continuing with respect to Indebtedness the
  outstanding principal amount of which exceeds in the aggregate $75,000,000;
  </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that such amount shall
  be automatically increased so that it remains consistent with any increase to
  the counterpart monetary threshold included in Section&nbsp;8 of the PG&amp;E
  Utility Credit Agreement (except that such amount shall not in an event exceed
  $100,000,000); or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;the
  Borrower or any of its Significant Subsidiaries shall commence any case,
  proceeding or other action (A)&nbsp;under any existing or future law of any
  jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
  reorganization or relief of debtors, seeking to have an order for relief
  entered with respect to it, or seeking to adjudicate it a bankrupt or
  insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
  liquidation, dissolution, composition </FONT></P></UL>
<P align=center><FONT size=2>41</FONT></P>
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<UL><BR>
  <P><FONT size=2>or other relief with respect to it or its debts, or
  (B)&nbsp;seeking appointment of a receiver, trustee, custodian, conservator or
  other similar official for it or for all or any substantial part of its
  assets, or the Borrower or any of its Significant Subsidiaries shall make a
  general assignment for the benefit of its creditors; or (ii)&nbsp;there shall
  be commenced against the Borrower or any of its Significant Subsidiaries any
  case, proceeding or other action of a nature referred to in clause&nbsp;(i)
  above that (A)&nbsp;results in the entry of an order for relief or any such
  adjudication or appointment or (B)&nbsp;remains undismissed, undischarged or
  unbonded for a period of 60&nbsp;days; or (iii)&nbsp;there shall be commenced
  against the Borrower or any of its Significant Subsidiaries any case,
  proceeding or other action seeking issuance of a warrant of attachment,
  execution, distraint or similar process against all or any substantial part of
  its assets that results in the entry of an order for any such relief that
  shall not have been vacated, discharged, or stayed or bonded pending appeal
  within 60&nbsp;days from the entry thereof; or (iv)&nbsp;the Borrower or any
  of its Significant Subsidiaries shall generally not, or shall be unable to, or
  shall admit in writing its inability to, pay its debts as they become due; or
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;(i)&nbsp;any
  Person shall engage in any "prohibited transaction" (as defined in
  Section&nbsp;406 of ERISA or Section&nbsp;4975 of the Code) involving any
  Plan, (ii)&nbsp;any "accumulated funding deficiency" (as defined in
  Section&nbsp;302 of ERISA), whether or not waived, shall exist with respect to
  any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets
  of the Borrower or any of its Significant Subsidiaries or any Commonly
  Controlled Entity, (iii)&nbsp;a Reportable Event shall occur with respect to,
  or proceedings shall commence to have a trustee appointed, or a trustee shall
  be appointed, to administer or to terminate, any Single Employer Plan, which
  Reportable Event or commencement of proceedings or appointment of a trustee
  is, in the reasonable opinion of the Required Lenders, likely to result in the
  termination of such Plan for purposes of Title IV of ERISA, (iv)&nbsp;any
  Single Employer Plan shall terminate for purposes of Title IV of ERISA,
  (v)&nbsp;the Borrower or any of its Significant Subsidiaries shall, or in the
  reasonable opinion of the Required Lenders is likely to, incur any liability
  in connection with a withdrawal from, or the Insolvency or Reorganization of,
  a Multiemployer Plan or (vi)&nbsp;any other event or condition shall occur or
  exist with respect to a Plan; and in each case in clauses (i)&nbsp;through
  (vi)&nbsp;above, such event or condition, together with all other such events
  or conditions, if any, could reasonably be expected to have a Material Adverse
  Effect; or </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;one
  or more judgments or decrees shall be entered against the Borrower or any of
  its Significant Subsidiaries involving in the aggregate a liability (not paid
  or, subject to customary deductibles, fully covered by insurance as to which
  the relevant insurance company has not denied coverage) of $75,000,000 or
  more, and all such judgments or decrees shall not have been vacated,
  discharged, stayed or bonded pending appeal within 30&nbsp;days from the entry
  thereof; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that the
  amount referred to above in this paragraph shall be automatically increased so
  that it remains consistent with any increase to the counterpart monetary
  threshold included in Section&nbsp;8 of the PG&amp;E Utility Credit Agreement
  (except that such amount shall not in any event exceed $100,000,000); or
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;there
  shall have occurred a Change of Control. </FONT></P></UL>
<P><FONT size=2>then, and in any such event, (A)&nbsp;if such event is an Event
of Default specified in clause&nbsp;(i) or (ii)&nbsp;of paragraph&nbsp;(f) above
with respect to the Borrower, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder) shall
immediately become due and payable, and (B)&nbsp;if such event is any other
Event of Default, either or both of the following actions may be taken:
(i)&nbsp;with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower declare the Commitments to be terminated </FONT></P>
<P align=center><FONT size=2>42</FONT></P>
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<P><FONT size=2>forthwith, whereupon the Commitments shall immediately
terminate; and (ii)&nbsp;with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith,
whereupon the same shall immediately become due and payable. With respect to all
Letters of Credit with respect to which presentment for honor shall not have
occurred at the time of an acceleration pursuant to this paragraph, the Borrower
shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the other
Loan Documents. After all such Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower. </FONT></P>
<P align=center><FONT size=2><B>SECTION&nbsp;9. THE AGENTS </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Appointment.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Delegation of Duties.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Exculpatory Provisions.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither any Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i)&nbsp;liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or
(ii)&nbsp;responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the </FONT></P>
<P align=center><FONT size=2>43</FONT></P>
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<P><FONT size=2>Borrower to perform its obligations hereunder or thereunder. The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Borrower. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reliance by Administrative
Agent.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice of Default.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-Reliance on Agents and Other
Lenders.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of the Borrower or any of its
affiliates, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender </FONT></P>
<P align=center><FONT size=2>44</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=6,SEQ=49,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=723509,FOLIO='44',FILE='DISK033:[04SFO2.04SFO1542]DO1542A.;6',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_do1542_1_45></A><BR>
<P><FONT size=2>with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any of its affiliates that may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Percentages in effect on the date on which indemnification is sought
under this Section (or, if indemnification is sought after the date upon which
the Commitments shall have terminated and the Loans shall have been paid in
full, ratably in accordance with such Percentages immediately prior to such
date), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing;
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Agent's gross negligence or willful
misconduct. The agreements in this Section shall survive for two years after
repayment of the Loans and all other amounts payable hereunder. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Agent in Its Individual
Capacity.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.9</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Successor Administrative
Agent.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent
may resign as Administrative Agent upon 10&nbsp;days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section&nbsp;8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "</FONT><FONT
size=2><I>Administrative Agent</I></FONT><FONT size=2>" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10&nbsp;days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section&nbsp;9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.10</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Documentation Agents and Syndication
Agent.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;None of the Documentation
Agents or the Syndication Agent shall have any duties or responsibilities
hereunder in its capacity as such. </FONT></P>
<P align=center><FONT size=2>45</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=7,SEQ=50,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=356180,FOLIO='45',FILE='DISK033:[04SFO2.04SFO1542]DO1542A.;6',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_do1542_1_46></A><BR>
<P align=center><FONT size=2><B>SECTION&nbsp;10. MISCELLANEOUS </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendments and Waivers.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Neither this Agreement, any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section&nbsp;10.1. The Required
Lenders and the Borrower may, or, with the written consent of the Required
Lenders, the Administrative Agent and the Borrower may, from time to time,
(a)&nbsp;enter into written amendments, supplements or modifications hereto and
to the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Borrower hereunder or thereunder or (b)&nbsp;waive, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; </FONT><FONT size=2><I>provided</I></FONT><FONT size=2>,
</FONT><FONT size=2><I>however</I></FONT><FONT size=2>, that no such waiver and
no such amendment, supplement or modification shall: </FONT></P>
<UL>
  <UL>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;forgive
    the principal amount or extend the final scheduled date of maturity of any
    Loan, reduce the stated rate of any interest or fee payable hereunder
    (except in connection with the waiver of applicability of any post-default
    increase in interest rates (which waiver shall be effective with the consent
    of the Required Lenders)) or extend the scheduled date of any payment
    thereof, or increase the amount or extend the expiration date of any
    Lender's Commitment, in each case without the written consent of each Lender
    directly affected thereby (except that only the Lenders who are increasing
    their Commitments are required to consent to a request by the Borrower under
    Section&nbsp;2.3 to increase the Total Commitment); </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;eliminate
    or reduce the voting rights of any Lender under this Section&nbsp;10.1 or
    Section&nbsp;10.6(a)(i)&nbsp;without the written consent of such Lender;
    </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;reduce
    any percentage specified in the definition of Required Lenders, consent to
    the assignment or transfer by the Borrower of any of its rights and
    obligations under this Agreement and the other Loan Documents, in each case
    without the written consent of all Lenders; </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;amend,
    modify or waive any provision of Section&nbsp;2.14 related to </FONT><FONT
    size=2><I>pro rata</I></FONT><FONT size=2> treatment without the consent of
    each Lender directly affected thereby; </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;amend,
    modify or waive any provision of Section&nbsp;9 without the written consent
    of the Administrative Agent; </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;amend,
    modify or waive any provision of Section&nbsp;2.4 or 2.5 without the written
    consent of the Swingline Lender; or </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;amend,
    modify or waive any provision of Section&nbsp;3 or any other provision
    affecting the Issuing Lenders without the written consent of each Issuing
    Lender affected thereby. </FONT></P></UL></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Required
Lenders shall have approved any amendment which requires the consent of all of
the Lenders, the Borrower shall be permitted to replace any non-consenting
Lender with another financial institution, </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2> that, (i)&nbsp;the replacement
financial institution shall purchase at par, all Loans and other amounts owing
to such replaced Lender on or prior to the date of replacement, (ii)&nbsp;the
Borrower shall be liable to such replaced Lender under Section&nbsp;2.17 if any
Eurodollar Loan </FONT></P>
<P align=center><FONT size=2>46</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=8,SEQ=51,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=613304,FOLIO='46',FILE='DISK033:[04SFO2.04SFO1542]DO1542A.;6',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_do1542_1_47></A><BR>
<P><FONT size=2>owing to such replaced Lender shall be purchased other than on
the last day of the Interest Period relating thereto (as if such purchase
constituted a prepayment of such Loans), (iii)&nbsp;such replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent and, with respect to any replacement financial institution
that is not an Eligible Assignee, each Issuing Lender, (iv)&nbsp;the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section&nbsp;10.6 (</FONT><FONT size=2><I>provided</I></FONT><FONT
size=2> that the Borrower shall be obligated to pay the registration and
processing fee referred to therein) and (v)&nbsp;any such replacement shall not
be deemed to be a waiver of any rights the Borrower, the Administrative Agent or
any other Lender shall have against the replaced Lender. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
</FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="70%" border=0>
  <TR vAlign=top>
    <TD width="23%"><FONT size=2>Borrower:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="74%"><FONT size=2>PG&amp;E Corporation<BR>One Market
      Street<BR>Spear Tower, Suite 2400<BR>San Francisco, California
      94105<BR>Attention: Assistant Treasurer<BR>Telecopy: (415)
      267-7265/7268<BR>Telephone: (415) 267-7053</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="23%"><FONT size=2><BR>with a copy to:</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="74%"><FONT size=2><BR>PG&amp;E Corporation<BR>One Market
      Street<BR>Spear Tower, Suite 2400<BR>San Francisco, California
      94105<BR>Attention: Chief Counsel, Corporate<BR>Telecopy: (415)
      817-8225<BR>Telephone: (415) 817-8200</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="23%"><FONT size=2><BR>Administrative Agent:</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="74%"><FONT size=2><BR>BNP Paribas<BR>787 7<SUP>th</SUP>
      Avenue<BR>New York, New York 10019<BR>Attention: Michelle
      Bruno<BR>Telecopy: (212) 471-6697<BR>Telephone: (212)
471-6642</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="23%"><FONT size=2><BR>Issuing Lender:</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="74%"><FONT size=2><BR>As notified by the Issuing Lender to the
      Administrative Agent and the Borrower.</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P><FONT size=2><I>provided</I></FONT><FONT size=2> that any notice, request or
demand to or upon the Administrative Agent, the Issuing Lenders or any Lender
shall not be effective until received. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notices and
other communications to the Administrative Agent, the Issuing Lenders or the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2> that the foregoing shall not apply to
notices pursuant to Section&nbsp;2 unless otherwise agreed by the Administrative
Agent, the applicable Issuing Lender and each Lender. The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures </FONT></P>
<P align=center><FONT size=2>47</FONT></P>
<HR noShade>

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name=page_do1542_1_48></A><BR>
<P><FONT size=2>approved by it; </FONT><FONT size=2><I>provided</I></FONT><FONT
size=2> that approval of such procedures may be limited to particular notices or
communications. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Waiver; Cumulative
Remedies.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Survival of Representations and
Warranties.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Payment of Expenses and Taxes.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower agrees (a)&nbsp;to pay or reimburse
the Administrative Agent, each Issuing Lender and the Lenders for all their
respective reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including the
reasonable fees and disbursements of only one counsel to the Administrative
Agent and filing and recording fees and expenses, with statements with respect
to the foregoing to be submitted to the Borrower prior to the Closing Date (in
the case of amounts to be paid on the Closing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b)&nbsp;to pay or reimburse each
Lender, each Issuing Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of only one counsel to the
Administrative Agent, the Lenders and the Issuing Lenders, (c)&nbsp;to pay,
indemnify, and hold each Lender, each Issuing Lender and the Administrative
Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and Other Taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d)&nbsp;to pay, indemnify, and hold
each Lender, each Issuing Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "</FONT><FONT size=2><I>Indemnitee</I></FONT><FONT size=2>")
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement and performance of this Agreement, the other Loan Documents and any
such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower and
its Significant Subsidiaries or any of the Properties and the reasonable fees
and expenses of one legal counsel in connection with claims, actions or
proceedings by any Indemnitee against the Borrower under any Loan Document (all
the foregoing in this clause&nbsp;(d), collectively, the "</FONT><FONT
size=2><I>Indemnified Liabilities</I></FONT><FONT size=2>"), </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, that the Borrower shall have no
obligation hereunder to any Indemnitee with respect to Indemnified Liabilities
to the extent such Indemnified Liabilities resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Significant Subsidiaries not to assert, and hereby waives and agrees
to cause its Significant Subsidiaries to waive, all rights for contribution or
any other rights </FONT></P>
<P align=center><FONT size=2>48</FONT></P>
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name=page_do1542_1_49></A><BR>
<P><FONT size=2>of recovery with respect to all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this
Section&nbsp;10.5 shall be payable not later than 30&nbsp;days after written
demand therefor, subject to the Borrower's receipt of reasonably detailed
invoices. Statements payable by the Borrower pursuant to this Section&nbsp;10.5
shall be submitted to Assistant Treasurer (Telephone No. (415)&nbsp;267-7053)
(Telecopy No. (415)&nbsp;267-7265/7268), at the address of the Borrower set
forth in Section&nbsp;10.2 with a copy to Chief Counsel, Corporate (Telephone
No. (415)&nbsp;817-8200) (Telecopy No. (415)&nbsp;817-8225), at the address of
the Borrower set forth in Section&nbsp;10.2, or to such other Person or address
as may be hereafter designated by the Borrower in a written notice to the
Administrative Agent. The agreements in this Section&nbsp;10.5 shall survive for
two years after repayment of the Loans and all other amounts payable hereunder.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Successors and Assigns; Participations and
Assignments.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
  provisions of this Agreement shall be binding upon and inure to the benefit of
  the parties hereto and their respective successors and assigns permitted
  hereby (including any affiliate of the Issuing Lender that issues any Letter
  of Credit), except that (i)&nbsp;the Borrower may not assign or otherwise
  transfer any of its rights or obligations hereunder without the prior written
  consent of each Lender (and any attempted assignment or transfer by the
  Borrower without such consent shall be null and void) and (ii)&nbsp;no Lender
  may assign or otherwise transfer its rights or obligations hereunder except in
  accordance with this Section. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;(i)&nbsp;Subject
  to the conditions set forth in paragraph&nbsp;(b)(ii)&nbsp;below, any Lender
  may assign to one or more assignees (each, an "</FONT><FONT
  size=2><I>Assignee</I></FONT><FONT size=2>") all or a portion of its rights
  and obligations under this Agreement (including all or a portion of its
  Commitments and the Loans at the time owing to it) with the prior written
  consent (such consent not to be unreasonably withheld) of: </FONT></P>
  <UL>
    <UL>
      <P><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;the
      Borrower, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that no
      consent of the Borrower shall be required for an assignment to a Lender,
      an Eligible Assignee that is an affiliate of any Lender party to this
      Agreement on the Closing Date or, if an Event of Default has occurred and
      is continuing, any other Person; and </FONT></P>
      <P><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;the
      Administrative Agent and each Issuing Lender, </FONT><FONT
      size=2><I>provided</I></FONT><FONT size=2> that (1)&nbsp;no consent of the
      Administrative Agent shall be required for an assignment of any Commitment
      to an assignee that is a Lender with a Commitment immediately prior to
      giving effect to such assignment, and (2)&nbsp;no consent of any Issuing
      Lender shall be required for any assignment to an Eligible Assignee.
      </FONT></P></UL>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;Assignments
    shall be subject to the following additional conditions: </FONT></P>
    <UL>
      <P><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;except
      in the case of an assignment to a Lender, an Eligible Assignee that is an
      affiliate of any Lender party to this Agreement on the Closing Date or an
      assignment of the entire remaining amount of the assigning Lender's
      Commitments or Loans, the amount of the Commitments or Loans of the
      assigning Lender subject to each such assignment (determined as of the
      date the Assignment and Assumption with respect to such assignment is
      delivered to the Administrative Agent) shall not be less than $5,000,000
      unless each of the Borrower and the Administrative Agent otherwise
      consent, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that
      (1)&nbsp;no such consent of the Borrower shall be required if an Event of
      Default has occurred and is continuing and (2)&nbsp;with respect to any
      Lender party to this Agreement on the Closing Date, such amounts shall be
      aggregated in respect of such Lender and any affiliate of such Lender that
      is an Eligible Assignee; </FONT></P></UL></UL></UL>
<P align=center><FONT size=2>49</FONT></P>
<HR noShade>

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name=page_do1542_1_50></A>
<UL>
  <UL>
    <UL>
      <P><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;the
      parties to each assignment shall execute and deliver to the Administrative
      Agent an Assignment and Assumption, together with a processing and
      recordation fee of $3,500; and </FONT></P>
      <P><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;the
      Assignee, if it shall not be a Lender, shall deliver to the Administrative
      Agent an administrative questionnaire. </FONT></P></UL>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;Subject
    to acceptance and recording thereof pursuant to
    paragraph&nbsp;(b)(iv)&nbsp;below, from and after the effective date
    specified in each Assignment and Assumption the Assignee thereunder shall be
    a party hereto and, to the extent of the interest assigned by such
    Assignment and Assumption, have the rights and obligations of a Lender under
    this Agreement, and the assigning Lender thereunder shall, to the extent of
    the interest assigned by such Assignment and Assumption, be released from
    its obligations under this Agreement (and, in the case of an Assignment and
    Assumption covering all of the assigning Lender's rights and obligations
    under this Agreement, such Lender shall cease to be a party hereto but shall
    continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and
    10.5 but shall be subject to the limitations set forth therein). Any
    assignment or transfer by a Lender of rights or obligations under this
    Agreement that does not comply with this Section&nbsp;10.6 shall be treated
    for purposes of this Agreement as a sale by such Lender of a participation
    in such rights and obligations in accordance with paragraph&nbsp;(c) of this
    Section. </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;The
    Administrative Agent, acting for this purpose as an agent of the Borrower,
    shall maintain at one of its offices a copy of each Assignment and
    Assumption delivered to it and a register for the recordation of the names
    and addresses of the Lenders, and the Commitments of, and principal amount
    of the Loans and L/C Obligations owing to, each Lender pursuant to the terms
    hereof from time to time (the "</FONT><FONT
    size=2><I>Register</I></FONT><FONT size=2>"). The entries in the Register
    shall be conclusive, in the absence of manifest error, and the Borrower, the
    Administrative Agent, the Issuing Lenders and the Lenders may treat each
    Person whose name is recorded in the Register pursuant to the terms hereof
    as a Lender hereunder for all purposes of this Agreement, notwithstanding
    notice to the contrary. The Register shall be available for inspection by
    the Borrower, each Issuing Lender and any Lender, at any reasonable time and
    from time to time upon reasonable prior notice. </FONT></P>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;Upon
    its receipt of a duly completed Assignment and Assumption executed by an
    assigning Lender and an Assignee, the Assignee's completed administrative
    questionnaire (unless the Assignee shall already be a Lender hereunder), the
    processing and recordation fee referred to in paragraph&nbsp;(b) of this
    Section and any written consent to such assignment required by
    paragraph&nbsp;(b) of this Section, the Administrative Agent shall accept
    such Assignment and Assumption and record the information contained therein
    in the Register. No assignment shall be effective for purposes of this
    Agreement unless it has been recorded in the Register as provided in this
    paragraph. </FONT></P></UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;(i)&nbsp;Any
  Lender may, without the consent of the Borrower or the Administrative Agent,
  sell participations to one or more banks or other entities (a "</FONT><FONT
  size=2><I>Participant</I></FONT><FONT size=2>") in all or a portion of such
  Lender's rights and obligations under this Agreement (including all or a
  portion of its Commitments and the Loans owing to it); </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that (A)&nbsp;such Lender's
  obligations under this Agreement shall remain unchanged, (B)&nbsp;such Lender
  shall remain solely responsible to the other parties hereto for the
  performance of such obligations and (C)&nbsp;the Borrower, the Administrative
  Agent, the Issuing Lender and the other Lenders shall continue to deal solely
  and directly with such Lender in connection with such Lender's rights and
  obligations under this Agreement. Any agreement pursuant to which a Lender
  sells such a participation shall provide that such Lender shall retain the
  sole right to enforce this Agreement and to approve any amendment,
  modification or waiver of any provision of this Agreement; </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that such agreement may provide
  that such </FONT></P></UL>
<P align=center><FONT size=2>50</FONT></P>
<HR noShade>

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name=page_do1542_1_51></A>
<UL>
  <P><FONT size=2>Lender will not, without the consent of the Participant, agree
  to any amendment, modification or waiver that (1)&nbsp;requires the consent of
  each Lender directly affected thereby pursuant to the proviso to the second
  sentence of Section&nbsp;10.1 and (2)&nbsp;directly affects such Participant.
  Subject to paragraph&nbsp;(c)(ii)&nbsp;of this Section, the Borrower agrees
  that each Participant shall be entitled to the benefits of Sections 2.15, 2.16
  and 2.17 to the same extent as if it were a Lender and had acquired its
  interest by assignment pursuant to paragraph&nbsp;(b) of this Section.
  </FONT></P>
  <UL>
    <P><FONT
    size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;Notwithstanding
    anything to the contrary herein, a Participant shall not be entitled to
    receive any greater payment under Section&nbsp;2.15 or 2.16 than the
    applicable Lender would have been entitled to receive with respect to the
    participation sold to such Participant, unless the sale of the participation
    to such Participant is made with the Borrower's prior written consent to
    such greater payments. Any Participant that is a Non-U.S. Lender shall not
    be entitled to the benefits of Section&nbsp;2.16 unless such Participant
    complies with Section&nbsp;2.16(d). </FONT></P></UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Any
  Lender may at any time pledge or assign a security interest in all or any
  portion of its rights under this Agreement to secure obligations of such
  Lender, including any pledge or assignment to secure obligations to a Federal
  Reserve Bank, and this Section shall not apply to any such pledge or
  assignment of a security interest; </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that no such pledge or assignment
  of a security interest shall release a Lender from any of its obligations
  hereunder or substitute any such pledgee or Assignee for such Lender as a
  party hereto. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;The
  Borrower, upon receipt of written notice from the relevant Lender, agrees to
  issue Notes to any Lender requiring Notes to facilitate transactions of the
  type described in paragraph&nbsp;(d) above. </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
  the foregoing, any Conduit Lender may assign any or all of the Loans it may
  have funded hereunder to its designating Lender without the consent of the
  Borrower or the Administrative Agent and without regard to the limitations set
  forth in Section&nbsp;10.6(b). Each of the Borrower, each Lender and the
  Administrative Agent hereby confirms that it will not institute against a
  Conduit Lender or join any other Person in instituting against a Conduit
  Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
  proceeding under any state bankruptcy or similar law, for one year and one day
  after the payment in full of the latest maturing commercial paper note issued
  by such Conduit Lender; </FONT><FONT size=2><I>provided</I></FONT><FONT
  size=2>, however, that each Lender designating any Conduit Lender hereby
  agrees to indemnify, save and hold harmless each other party hereto for any
  loss, cost, damage, expense, obligations, penalties, actions, judgments, suits
  or any kind whatsoever arising out of its inability to institute such a
  proceeding against such Conduit Lender during such period of forbearance.
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;Notwithstanding
  anything to the contrary in this Section, none of the Agents, in their
  capacity as Lenders, will assign without the consent of the Borrower, prior to
  the Closing Date, any of the Commitments held by them on the date of this
  Agreement. </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Adjustments; Set-off.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender, if any
Lender (a "</FONT><FONT size=2><I>Benefitted Lender</I></FONT><FONT size=2>")
shall receive any payment of all or part of the Obligations owing to it
hereunder, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section&nbsp;8(f), or otherwise), in a greater proportion than
any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender hereunder, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of the Obligations owing to each such other Lender hereunder, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; </FONT><FONT
size=2><I>provided</I></FONT><FONT size=2>, </FONT><FONT
size=2><I>however</I></FONT><FONT size=2>, that if all or any portion of such
excess payment or benefits is </FONT></P>
<P align=center><FONT size=2>51</FONT></P>
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name=page_do1542_1_52></A>
<P><FONT size=2>thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;In
  addition to any rights and remedies of the Lenders provided by law, including
  other rights of set-off, each Lender shall have the right, without prior
  notice to the Borrower, any such notice being expressly waived by the Borrower
  to the extent permitted by applicable law, upon any amount becoming due and
  payable by the Borrower hereunder (whether at the stated maturity, by
  acceleration or otherwise), after any applicable grace period, to set off and
  appropriate and apply against such amount any and all deposits (general or
  special, time or demand, provisional or final), in any currency, and any other
  credits, indebtedness or claims, in any currency, in each case whether direct
  or indirect, absolute or contingent, matured or unmatured, at any time held or
  owing by such Lender or any branch, affiliate or agency thereof to or for the
  credit or the account of the Borrower. Each Lender agrees promptly to notify
  the Borrower and the Administrative Agent after any such setoff and
  application made by such Lender, </FONT><FONT
  size=2><I>provided</I></FONT><FONT size=2> that the failure to give such
  notice shall not affect the validity of such setoff and application.
  </FONT></P></UL>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.9</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Severability.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.10</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Integration.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.11</FONT><FONT
size=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW.</I></B></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size=2><B>THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.</B></FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.12</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Submission To Jurisdiction;
Waivers.</I></FONT><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower hereby
irrevocably and unconditionally: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;submits
  for itself and its property in any legal action or proceeding relating to this
  Agreement and the other Loan Documents to which it is a party, or for
  recognition and enforcement of any judgment in respect thereof, to the
  non-exclusive general jurisdiction of the courts of the State of New York, the
  courts of the United States for the Southern District of New York, and
  appellate courts from any thereof; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;consents
  that any such action or proceeding may be brought in such courts and waives
  any objection that it may now or hereafter have to the venue of any such
  action or proceeding in any such court or that such action or proceeding was
  brought in an inconvenient court and agrees not to plead or claim the same;
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;agrees
  that service of process in any such action or proceeding may be effected by
  mailing a copy thereof by registered or certified mail (or any substantially
  similar form of mail), postage </FONT></P></UL>
<P align=center><FONT size=2>52</FONT></P>
<HR noShade>

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name=page_do1542_1_53></A>
<UL><BR>
  <P><FONT size=2>prepaid, to the Borrower at its address set forth in
  Section&nbsp;10.2 or at such other address of which the Administrative Agent
  shall have been notified pursuant thereto; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;agrees
  that nothing herein shall affect the right to effect service of process in any
  other manner permitted by law or shall limit the right to sue in any other
  jurisdiction; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;waives,
  to the maximum extent not prohibited by law, any right it may have to claim or
  recover in any legal action or proceeding relating to this Agreement or any
  other Loan Document any special, exemplary, punitive or consequential damages.
  </FONT></P></UL>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.13</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Acknowledgments.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower hereby acknowledges that:
</FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;it
  has been advised by counsel in the negotiation, execution and delivery of this
  Agreement and the other Loan Documents; </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;neither
  the Administrative Agent nor any Lender has any fiduciary relationship with or
  duty to the Borrower arising out of or in connection with this Agreement or
  any of the other Loan Documents, and the relationship between Administrative
  Agent and Lenders, on one hand, and the Borrower, on the other hand, in
  connection herewith or therewith is solely that of debtor and creditor; and
  </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;no
  joint venture is created hereby or by the other Loan Documents or otherwise
  exists by virtue of the transactions contemplated hereby among the Lenders or
  among the Borrower and the Lenders. </FONT></P></UL>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.14</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Confidentiality.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Administrative Agent and each Lender
agrees to keep confidential in accordance with such party's customary practices
(and in any event in compliance with applicable law regarding material
non-public information) all non-public information provided to it by the
Borrower, the Administrative Agent or any Lender pursuant to or in connection
with this Agreement that is designated by the provider thereof as confidential;
</FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that nothing herein
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a)&nbsp;to the Administrative Agent, any other Lender or any
affiliate thereof, (b)&nbsp;subject to an agreement to comply with the
provisions of this Section or substantially equivalent provisions, to any actual
or prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c)&nbsp;to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates (as long as such attorneys,
accountants and other professional advisors are subject to confidentiality
requirements substantially equivalent to this Section), (d)&nbsp;upon the
request or demand of any Governmental Authority, (e)&nbsp;in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f)&nbsp;if requested or required
to do so in connection with any litigation or similar proceeding, (g)&nbsp;that
has been publicly disclosed, (h)&nbsp;to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, or (i)&nbsp;in
connection with the exercise of any remedy hereunder or under any other Loan
Document, </FONT><FONT size=2><I>provided</I></FONT><FONT size=2> that, in the
case of clauses (d), (e)&nbsp;and (f)&nbsp;of this Section&nbsp;10.14, with the
exception of disclosure to bank regulatory authorities, the Borrower (to the
extent legally permissible) shall be given prompt prior notice so that it may
seek a protective order or other appropriate remedy. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.15</FONT><FONT
size=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;WAIVERS OF JURY TRIAL.</I></B></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;THE BORROWER, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.16</FONT><FONT
size=2><I>&nbsp;&nbsp;&nbsp;&nbsp;USA Patriot Act.</I></FONT><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October&nbsp;26, 2001)) (the "</FONT><FONT
size=2><I>Act</I></FONT><FONT size=2>"), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with the Act. </FONT></P>
<P align=center><FONT size=2>53</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=15,SEQ=58,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=22859,FOLIO='53',FILE='DISK033:[04SFO2.04SFO1542]DO1542A.;6',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written. </FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="79%" border=0>
   <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=5><FONT size=2>PG&amp;E CORPORATION</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Leroy Barnes</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
    </TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>Name:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2>Leroy Barnes</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>Title:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2>Vice President and Treasurer</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5><FONT size=2><BR>BNP PARIBAS, as Administrative Agent,
      Issuing Lender and as a Lender</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Mark A. Renaud</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;Mark A. Renaud<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Managing
      Director</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Francis J. DeLaney</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Francis J. DeLaney<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Managing
      Director</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5><FONT size=2><BR>DEUTSCHE BANK SECURITIES&nbsp;INC., as
      Syndication Agent</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2>&nbsp;<BR>&nbsp;Michael Starmer-Smith</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Michael Starmer-Smith<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Managing
      Director</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Richard Hensahll</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard Hensahll<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5><FONT size=2><BR>ABN AMRO BANK N.V., as Documentation Agent
      and as a Lender</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Stephanie B. Casas</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stephanie B. Casas<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President</FONT></TD></TR>
  <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;R. Scott Donaldson</FONT></TD>
  </tr>
  <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Scott Donaldson<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President</FONT></TD>
  </tr>
  <TR vAlign=top>
    <TD width="43%"></TD>
    <TD width="3%"></TD>
    <TD colSpan=5></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5><FONT size=2><BR>GOLDMAN SACHS CREDIT PARTNERS L.P., as
      Documentation Agent and as a Lender</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Steve Hickey</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Steve Hickey<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized
      Signatory</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5><FONT size=2><BR>UNION BANK OF CALIFORNIA, N.A., as
      Documentation Agent and as a Lender</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Dennis G. Blank</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dennis G. Blank<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President<br>
      </FONT></TD></TR>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">Barclays Bank PLC</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;Sydney G. Dennsi</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sydney G. Dennis<br>
      Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">CITICORP USA, INC.</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Dhaya Ranganathan</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dhaya Ranganathan<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">DEUTSCHE BANK AG NEW YORK BRANCH</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Michael Starmer-Smith&nbsp;</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;Michael Starmer-Smith<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ManagingDirector</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"></TD>
    <TD width="3%"></TD>
    <TD colSpan=5></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Richard Henshall</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Richard Henshall<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">JPMORGAN CHASE BANK, N.A.</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Thomas Casey</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thomas Casey<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">KBC BANK NV</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Jean-Pierre Diels</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jean-Pierre Diels<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First
      Vice President</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Eric Raskin</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eric Raskin<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">Lehman Brothers Bank, FSB</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Gary T. Taylor</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gary T. Taylor<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">MORGAN STANLEY BANK</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Daniel Twenge</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daniel Twenge<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vice
      President<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT></p>
      <p><font size="2">ROYAL BANK OF CANADA</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Linda M. Stephens</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Linda M. Stephens<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized
      Signatory<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">[THE BANK OF NEW YORK]</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>John V. Yancey, Jr.</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;John V. Yancey, Jr.<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SVP<br>
      </FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD colSpan=5>&nbsp;
      <p><FONT size=2>SIGNATURE PAGE TO PG&amp;E CORPORATION<BR>CREDIT
      AGREEMENT, DATED AS DECEMBER 10, 2004</FONT>
      </p>
      <p><font size="2">The Bank of Nova Scotia</font></p>
    </TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>Thane Rattew</FONT></TD>
   </tr>
   <tr>
    <TD width="43%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
      <FONT size=2>Name:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thane Rattew<BR>Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Managing
      Director</FONT></TD>
   </tr>
  <TR vAlign=top>
    <TD width="43%"></TD>
    <TD width="3%"></TD>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD colSpan=3>
      <br>
    </TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=59,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=665902,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DQ1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:26' --><A
name=page_dq1542_1_2></A>
<P align=right><FONT size=2><B>EXHIBIT A </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF </B></FONT></P>
<P align=center><FONT size=2><B>NEW LENDER SUPPLEMENT </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is
made to the $200,000,000 Credit Agreement, dated as of December&nbsp;10, 2004,
as amended, supplemented or modified from time to time (the "</FONT><FONT
size=2><I>Credit Agreement</I></FONT><FONT size=2>"), among PG&amp;E
Corporation, a California corporation (the "</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>"), the Lenders parties thereto, BNP
Paribas ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and Deutsche Bank
Securities&nbsp;Inc. ("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT
size=2>"), as joint lead arrangers and joint bookrunners (together and in such
capacities, the "</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"),
Deutsche, as syndication agent, ABN Amro Bank N.V., Goldman Sachs Credit
Partners L.P. and Union Bank of California, N.A., as documentation agents, and
BNP, as administrative agent (in such capacity, together with any successor
thereto, the "</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT
size=2>"). Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The New Lender
identified on Schedule&nbsp;l hereto (the "</FONT><FONT size=2><I>New
Lender</I></FONT><FONT size=2>"), the Administrative Agent and the Borrower
agree as follows: </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
New Lender hereby irrevocably makes a Commitment to the Borrower in the amount
set forth on Schedule&nbsp;1 hereto (the "</FONT><FONT size=2><I>New
Commitment</I></FONT><FONT size=2>") pursuant to Section&nbsp;2.3(b) of the
Credit Agreement. From and after the Effective Date (as defined below), the New
Lender will be a Lender under the Credit Agreement with respect to the New
Commitment. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Administrative Agent (a)&nbsp;makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement; and (b)&nbsp;makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower, any of its Subsidiaries or any other obligor or the performance or
observance by the Borrower, any of its Subsidiaries or any other obligor of any
of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant hereto or thereto. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
New Lender (a)&nbsp;represents and warrants that it is legally authorized to
enter into this New Lender Supplement; (b)&nbsp;confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section&nbsp;6.1 of the Credit Agreement and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this New Lender Supplement;
(c)&nbsp;agrees that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any other instrument or document furnished pursuant hereto or thereto;
(d)&nbsp;appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; and (e)&nbsp;agrees that it
will be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effective date of this New Lender Supplement shall be the Effective Date of the
New Commitment described in Schedule&nbsp;1 hereto (the "</FONT><FONT
size=2><I>Effective Date</I></FONT><FONT size=2>"). Following the execution of
this New Lender Supplement by each of the New Lender and the Borrower, it will
be delivered to the Administrative Agent for acceptance and recording by it
pursuant to the Credit Agreement, effective as of the Effective Date (which
shall not, unless otherwise agreed to by the Administrative Agent, be
</FONT></P>
<P align=center><FONT size=2>2</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=60,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=36458,FOLIO='2',FILE='DISK033:[04SFO2.04SFO1542]DQ1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:26' --><A
name=page_dq1542_1_3></A><BR>
<P><FONT size=2>earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent). </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the New Commitment
(including payments of principal, interest, fees and other amounts) to the New
Lender for amounts which have accrued on and subsequent to the Effective Date.
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
and after the Effective Date, the New Lender shall be a party to the Credit
Agreement and, to the extent provided in this New Lender Supplement, have the
rights and obligations of a Lender thereunder and shall be bound by the
provisions thereof. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
New Lender Supplement shall be governed by and construed in accordance with the
laws of the State of New York. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the parties hereto have caused this New Lender Supplement to be
executed as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
200&nbsp;&nbsp;&nbsp;&nbsp;by their respective duly authorized officers on
Schedule&nbsp;1 hereto. </FONT></P>
<P align=center><FONT size=2><I>[Remainder of page intentionally left blank.
Schedule&nbsp;1 to follow.]</I></FONT></P>
<P align=center><FONT size=2>3</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=61,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=908230,FOLIO='3',FILE='DISK033:[04SFO2.04SFO1542]DQ1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:26' -->
<P align=center><FONT size=2><B>Schedule&nbsp;1 </B></FONT></P>
<P align=center><FONT size=2><B>to New Lender Supplement </B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=bottom>
    <TD vAlign=top width="38%"><FONT size=2>Name of New Lender:</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="59%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="38%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="59%">
      <HR noShade>
    </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="38%"><FONT size=2><BR>Effective Date of New
      Commitment:</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="59%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="38%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="59%">
      <HR noShade>
    </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="38%"><FONT size=2>Principal Amount of New
      Commitment:</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="59%"><FONT size=2>$</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="38%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="59%">
      <HR noShade>
    </TD></TR></TABLE><!-- end of user-specified TAGGED TABLE --><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
   <TR vAlign=top>
    <TD colSpan=3><FONT size=2>[NAME OF NEW LENDER]</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>PG&amp;E CORPORATION</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top colSpan=3><FONT size=2><BR>BNP PARIBAS, as Administrative
      Agent and as Issuing Lender</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=4,SEQ=62,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=389074,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DQ1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:26' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P align=right><FONT size=2><B>EXHIBIT B </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF </B></FONT></P>
<P align=center><FONT size=2><B>COMMITMENT INCREASE SUPPLEMENT </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is
made to the $200,000,000 Credit Agreement, dated as of December&nbsp;10, 2004,
as amended, supplemented or modified from time to time (the "</FONT><FONT
size=2><I>Credit Agreement</I></FONT><FONT size=2>"), among PG&amp;E
Corporation, a California corporation (the "</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>"), the Lenders parties thereto, BNP
Paribas ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and Deutsche Bank
Securities&nbsp;Inc. ("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT
size=2>"), as joint lead arrangers and joint bookrunners (together and in such
capacities, the "</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"),
Deutsche, as syndication agent, ABN Amro Bank N.V., Goldman Sachs Credit
Partners L.P. and Union Bank of California, N.A., as documentation agents, and
BNP, as administrative agent (in such capacity, together with any successor
thereto, the "</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT
size=2>"). Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Increasing
Lender identified on Schedule&nbsp;l hereto (the "</FONT><FONT
size=2><I>Increasing Lender</I></FONT><FONT size=2>"), the Administrative Agent
and the Borrower agree as follows: </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Increasing Lender hereby irrevocably increases its Commitment to the Borrower by
the amount set forth on Schedule&nbsp;1 hereto under the heading "Principal
Amount of Increased Commitment" (the "</FONT><FONT size=2><I>Increased
Commitment</I></FONT><FONT size=2>") pursuant to Section&nbsp;2.3(c) of the
Credit Agreement. From and after the Effective Date (as defined below), the
Increasing Lender will be a Lender under the Credit Agreement with respect to
the Increased Commitment as well as its existing Commitment under the Credit
Agreement. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Administrative Agent (a)&nbsp;makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement; and (b)&nbsp;makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower, any of its Subsidiaries or any other obligor or the performance or
observance by the Borrower, any of its Subsidiaries or any other obligor of any
of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant hereto or thereto. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Increasing Lender (a)&nbsp;represents and warrants that it is legally authorized
to enter into this Commitment Increase Supplement; (b)&nbsp;confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section&nbsp;6.1 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Commitment
Increase Supplement; (c)&nbsp;agrees that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement or any other instrument or document furnished pursuant hereto or
thereto; (d)&nbsp;appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Credit Agreement or any other instrument or document furnished pursuant
hereto or thereto as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; and
(e)&nbsp;agrees that it will be bound by the provisions of the Credit Agreement
and will perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender.
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effective date of this Commitment Increase Supplement shall be the Effective
Date of the Increased Commitment described in Schedule&nbsp;1 hereto (the
"</FONT><FONT size=2><I>Effective Date</I></FONT><FONT size=2>"). Following the
execution of this Commitment Increase Supplement by each of the Increasing
Lender and the Borrower, it will be delivered to the Administrative Agent for
acceptance and recording by it pursuant to the Credit Agreement, effective as of
the Effective Date (which shall not, unless otherwise agreed to by the
</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=63,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=218918,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DS1542A.;3',USER='PHENTGE',CD='14-DEC-2004;03:22' --><A
name=page_ds1542_1_2></A><BR>
<P><FONT size=2>Administrative Agent, be earlier than five Business Days after
the date of such acceptance and recording by the Administrative Agent).
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Increased
Commitment (including payments of principal, interest, fees and other amounts)
to the Increasing Lender for amounts which have accrued on and subsequent to the
Effective Date. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Commitment Increase Supplement shall be governed by and construed in accordance
with the laws of the State of New York. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the parties hereto have caused this Commitment Increase Supplement to
be executed as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
200&nbsp;&nbsp;&nbsp;&nbsp;by their respective duly authorized officers on
Schedule&nbsp;1 hereto. </FONT></P>
<P align=center><FONT size=2><I>[Remainder of page intentionally left blank.
Schedule&nbsp;1 to follow.]</I></FONT></P>
<P align=center><FONT size=2>2</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=64,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=712650,FOLIO='2',FILE='DISK033:[04SFO2.04SFO1542]DS1542A.;3',USER='PHENTGE',CD='14-DEC-2004;03:22' -->
<P align=center><FONT size=2><B>Schedule&nbsp;1 </B></FONT></P>
<P align=center><FONT size=2><B>to Commitment Increase Supplement
</B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="76%" border=0>

  <TR vAlign=bottom>
    <TD vAlign=top width="40%"><FONT size=2>Name of Increasing
    Lender:</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="57%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="40%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="57%">
      <HR noShade>
    </TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="40%"><FONT size=2><BR>Effective Date of Increased
      Commitment:</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=top width="57%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="40%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="57%">
      <HR noShade>
    </TD></TR></TABLE><!-- end of user-specified TAGGED TABLE --><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="63%" border=0>

  <TR vAlign=bottom>
    <TH align=middle colSpan=2><FONT size=1><B>Principal Amount of Increased
      Commitment:<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="44%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle colSpan=2><FONT size=1><B>Total Amount of Commitment of
      Increasing Lender (including Increased Commitment):</B></FONT>
      <HR noShade>
    </TH></TR>
  <TR vAlign=top>
    <TD width="3%"><FONT size=2>$</FONT></TD>
    <TD width="19%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>$</FONT></TD>
    <TD align=right width="30%"><FONT
size=2>&nbsp;</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE --><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
   <TR vAlign=top>
    <TD colSpan=3><FONT size=2>[NAME OF INCREASING LENDER]</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>PG&amp;E CORPORATION</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=65,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=28048,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DS1542A.;3',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2>Accepted:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>BNP PARIBAS, as Administrative
    Agent</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=4,SEQ=66,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=271295,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DS1542A.;3',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P align=right><FONT size=2><B>EXHIBIT C </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF COMPLIANCE CERTIFICATE </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Compliance
Certificate is delivered pursuant to Section&nbsp;6.2 of the $200,000,000 Credit
Agreement, dated as of December&nbsp;10, 2004, as amended, supplemented or
modified from time to time (the "</FONT><FONT size=2><I>Credit
Agreement</I></FONT><FONT size=2>"), among PG&amp;E Corporation, a California
corporation (the "</FONT><FONT size=2><I>Borrower</I></FONT><FONT size=2>"), the
Lenders parties thereto, BNP Paribas ("</FONT><FONT
size=2><I>BNP</I></FONT><FONT size=2>") and Deutsche Bank Securities&nbsp;Inc.
("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT size=2>"), as joint lead
arrangers and joint bookrunners (together and in such capacities, the
"</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"), Deutsche, as
syndication agent, ABN Amro Bank N.V., Goldman Sachs Credit Partners L.P. and
Union Bank of California, N.A., as documentation agents, and BNP, as
administrative agent (in such capacity, together with any successor thereto, the
"</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT size=2>"). Terms
defined in the Credit Agreement are used herein as therein defined. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
hereby certifies to the Arrangers, the Agents and the Lenders as follows:
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
am the duly elected, qualified and acting [Chief Financial Officer][Treasurer]
[Assistant Treasurer] of the Borrower. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
have reviewed and am familiar with the contents of this Certificate. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the knowledge of the undersigned, during the fiscal period covered by the
financial statements attached hereto as </FONT><FONT size=2><I>Attachment
1</I></FONT><FONT size=2>, no Default or Event of Default has occurred and is
continuing [, except as set forth below]. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attached
hereto as </FONT><FONT size=2><I>Attachment 2</I></FONT><FONT size=2> are the
computations showing compliance with the covenant set forth in Section&nbsp;7.1
of the Credit Agreement. </FONT></P>
<P align=center><FONT size=2><I>[Remainder of page intentionally left blank.
Signature page to follow.]</I></FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=67,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=14111,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DU1542A.;1',USER='PHENTGE',CD='14-DEC-2004;03:22' -->
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the undersigned has executed this Compliance Certificate as of the date
set forth below. </FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3><FONT size=2>PG&amp;E CORPORATION</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD width="44%"><FONT
      size=2><BR>Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
      200&nbsp;&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=top width="5%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=top width="48%"><FONT
size=2><BR>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=68,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=754810,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DU1542A.;1',USER='PHENTGE',CD='14-DEC-2004;03:22' -->
<P align=right><FONT size=2><B>Attachment 2<BR>to Exhibit&nbsp;C </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information
described herein is as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
200&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>
<P align=center><FONT size=2>[Set forth Covenant Calculation] </FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=69,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=34418,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DU1542A.;1',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P align=right><FONT size=2><B>EXHIBIT D </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF CLOSING CERTIFICATE </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Closing
Certificate is delivered pursuant to Section&nbsp;5.1(e) of the $200,000,000
Credit Agreement, dated as of December&nbsp;10, 2004 (the "</FONT><FONT
size=2><I>Credit Agreement</I></FONT><FONT size=2>"), among PG&amp;E
Corporation, a California corporation (the "</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>"), the Lenders parties thereto, BNP
Paribas ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and Deutsche Bank
Securities&nbsp;Inc. ("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT
size=2>"), as joint lead arrangers and joint bookrunners (together and in such
capacities, the "</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"),
Deutsche, as syndication agent, ABN Amro Bank N.V., Goldman Sachs Credit
Partners L.P. and Union Bank of California, N.A., as documentation agents, and
BNP, as administrative agent (in such capacity, together with any successor
thereto, the "</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT
size=2>"). Terms defined in the Credit Agreement are used herein as therein
defined. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
Vice President and Treasurer of the Borrower hereby certifies to the Arrangers,
the Agents and the Lenders as follows: </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2><I>Each of the</I></FONT><FONT size=2> representations and warranties of
the Borrower set forth in the Credit Agreement </FONT><FONT size=2><I>that does
not contain a materiality qualification</I></FONT><FONT size=2> is true and
correct in all material respects on and as of the </FONT><FONT size=2><I>Closing
Date, and each of the representations and warranties of the Borrower set forth
in the Credit Agreement that contains a materiality qualification is true and
correct on and as of the Closing Date (or, to the extent such representations
and warranties specifically relate to an</I></FONT><FONT size=2> earlier date,
such representations and warranties were true and correct in all material
respects, </FONT><FONT size=2><I>or true and correct, as the case may
be,</I></FONT><FONT size=2> as of such earlier date). </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Linda
Y.H. Cheng is the duly elected and qualified Corporate Secretary of the Borrower
and the signature set forth for such officer below is such officer's true and
genuine signature. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
Default or Event of Default has occurred and is continuing as of the date
hereof. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
conditions precedent set forth in Section&nbsp;5.1 of the Credit Agreement were
satisfied as of the Closing Date. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
governmental and third party consents and approvals necessary in connection with
the Credit Agreement and the other Loan Documents and the transactions
contemplated thereby have been obtained and are now in full force and effect.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
Corporate Secretary of the Borrower certifies as follows: </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
are no liquidation or dissolution proceedings pending or to my knowledge
threatened against the Borrower. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attached
hereto as </FONT><FONT size=2><I>Annex 1</I></FONT><FONT size=2> is a true and
complete copy of resolutions duly adopted by the Board of Directors of the
Borrower on September&nbsp;15, 2004; such resolutions have not in any way been
amended, modified, revoked or rescinded, have been in full force and effect
since their adoption to and including the date hereof and are now in full force
and effect and are the only corporate proceedings of the Borrower now in force
relating to or affecting the Credit Agreement. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attached
hereto as </FONT><FONT size=2><I>Annex 2</I></FONT><FONT size=2> is a true and
complete copy of the Bylaws of the Borrower as in effect on the date hereof.
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attached
hereto as </FONT><FONT size=2><I>Annex 3</I></FONT><FONT size=2> is a true and
complete copy of the Articles of Incorporation of the Borrower as in effect on
the date hereof, and such Articles of Incorporation have not been amended,
repealed, modified or restated. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following persons are now duly elected and qualified officers of the Borrower
holding the offices indicated next to their respective names below, and that the
facsimile signatures affixed next to their respective names below are the
facsimile signatures of such officers, and each of such officers is </FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=70,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=1013007,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><BR>
<P><FONT size=2>duly authorized to execute and deliver on behalf of the Borrower
each of the Loan Documents to which it is a party and any certificate or other
document to be delivered by the Borrower pursuant to the Loan Documents to which
it is a party: </FONT></P><!-- User-specified TAGGED TABLE -->
<DIV align=center>
<TABLE cellSpacing=0 cellPadding=0 width="63%" border=0>
  <TR vAlign=bottom>
    <TH align=left width="62%"><FONT size=1><B>Name<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="11%"><FONT size=1><B>Office</B></FONT>
      <HR noShade>
    </TH>
    <TH width="3%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="21%"><FONT size=1><B>Signature</B></FONT>
      <HR noShade>
    </TH></TR>
  <TR vAlign=top>
    <TD width="62%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="11%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="21%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE></DIV><!-- end of user-specified TAGGED TABLE -->
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the undersigned have executed the Closing Certificate as of the date
set forth below. </FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="82%" border=0>
  <TR vAlign=top>
    <TD width="4%"><FONT size=2>By:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="2%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="4%"><FONT size=2>By:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="4%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
    </TD>
    <TD width="2%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="4%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3>
      <HR noShade>
    </TD></TR>
  <TR vAlign=top>
    <TD width="4%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>Name:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2>Leroy Barnes</FONT></TD>
    <TD width="2%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="4%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>Name:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2>Linda Y.H. Cheng</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="4%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>Title:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2>Vice President and Treasurer</FONT></TD>
    <TD width="2%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="4%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2>Title:</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2>Secretary</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=5><FONT size=2><BR>Date:
      December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004</FONT></TD>
    <TD width="2%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="4%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="8%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="35%"><FONT size=2><BR>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=71,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=65529,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' -->
<P align=right><FONT size=2><B>ANNEX 1 </B></FONT></P>
<P align=center><FONT size=2>[Board Resolutions] </FONT></P>
<HR noShade>

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<P align=right><FONT size=2><B>ANNEX 2 </B></FONT></P>
<P align=center><FONT size=2>[Bylaws of the Company] </FONT></P>
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<P align=right><FONT size=2><B>ANNEX 3 </B></FONT></P>
<P align=center><FONT size=2>[Articles of Incorporation] </FONT></P>
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<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=5,SEQ=74,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=273240,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' -->
<P align=right><FONT size=2><B>EXHIBIT E </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF<BR>ASSIGNMENT AND ASSUMPTION
</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is
made to the $200,000,000 Credit Agreement, dated as of December&nbsp;10, 2004,
as amended, supplemented or modified from time to time (the "</FONT><FONT
size=2><I>Credit Agreement</I></FONT><FONT size=2>"), among PG&amp;E
Corporation, a California corporation (the "</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>"), the Lenders parties thereto, BNP
Paribas ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and Deutsche Bank
Securities&nbsp;Inc. ("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT
size=2>"), as joint lead arrangers and joint bookrunners (together and in such
capacities, the "</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"),
Deutsche, as syndication agent, ABN Amro Bank N.V., Goldman Sachs Credit
Partners L.P. and Union Bank of California, N.A., as documentation agents, and
BNP, as administrative agent (in such capacity, together with any successor
thereto, the "</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT
size=2>"). Terms defined in the Credit Agreement are used herein as therein
defined. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Assignor
identified on Schedule&nbsp;l hereto (the "</FONT><FONT
size=2><I>Assignor</I></FONT><FONT size=2>") and the Assignee identified on
Schedule&nbsp;l hereto (the "</FONT><FONT size=2><I>Assignee</I></FONT><FONT
size=2>") agree as follows: </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Assignor hereby irrevocably sells and assigns to the Assignee without recourse
to the Assignor, and the Assignee hereby irrevocably purchases and assumes from
the Assignor without recourse to the Assignor, as of the Effective Date (as
defined below), (i)&nbsp;the interest described in Schedule&nbsp;1 hereto in and
to the Assignor's rights and obligations under the Credit Agreement in the
principal amount set forth on Schedule&nbsp;1 hereto and (ii)&nbsp;to the extent
permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender) against
any Person, whether known or unknown, arising under or in connection with the
Credit Agreement, any other documents or instruments delivered pursuant thereto
or the loan transactions governed thereby or in any way based on or related to
any of the foregoing, including, but not limited to, contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to
clause&nbsp;(i) above (the rights and obligations sold and assigned pursuant to
clauses (i)&nbsp;and (ii)&nbsp;above being referred to herein collectively as,
the "</FONT><FONT size=2><I>Assigned Interest</I></FONT><FONT size=2>").
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Assignor (a)&nbsp;makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b)&nbsp;makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c)&nbsp;attaches any Note
held by it evidencing the Assigned Facility and (i)&nbsp;requests that the
Administrative Agent, upon request by the Assignee, exchange the attached Note
for a new Note payable to the Assignee and (ii)&nbsp;if the Assignor has
retained any interest in the Assigned Facility, requests that the Administrative
Agent exchange the attached Note for a new Note payable to the Assignor, in each
case in amounts which reflect the assignment being made hereby (and after giving
effect to any other assignments which have become effective on the Effective
Date). </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Assignee (a)&nbsp;represents and warrants that it is legally authorized to enter
into this Assignment and Assumption; (b)&nbsp;confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
delivered pursuant to Section&nbsp;5.1(b) or Section&nbsp;6.1 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption; (c)&nbsp;agrees that it will, independently and
without reliance upon the Assignor, the Agents or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make </FONT></P>
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<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=6,SEQ=75,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=864804,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><BR>
<P><FONT size=2>its own credit decisions in taking or not taking action under
the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d)&nbsp;appoints and authorizes
the Agents to take such action as agent on its behalf and to exercise such
powers and discretion under the Credit Agreement, the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agents by the terms thereof, together with such powers as are
incidental thereto; and (e)&nbsp;agrees that it will be bound by the provisions
of the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to
Section&nbsp;2.16(d) of the Credit Agreement. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
effective date of this Assignment and Assumption shall be the Effective Date of
Assignment described in Schedule&nbsp;1 hereto (the "</FONT><FONT
size=2><I>Effective Date</I></FONT><FONT size=2>"). Following the execution of
this Assignment and Assumption, it will be delivered to the Administrative Agent
for acceptance by it and recording by the Administrative Agent pursuant to the
Credit Agreement, effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five Business
Days after the date of such acceptance and recording by the Administrative
Agent). </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
such acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) [to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date] [to
the Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Agent for periods prior to
the Effective Date or with respect to the making of this assignment directly
between themselves.] </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From
and after the Effective Date, (a)&nbsp;the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Assumption,
have the rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b)&nbsp;the Assignor
shall, to the extent provided in this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Credit Agreement.
</FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Assignment and Assumption shall be governed by and construed in accordance with
the laws of the State of New York. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the parties hereto have caused this Assignment and Assumption to be
executed as of the date first above written by their respective duly authorized
officers on Schedule&nbsp;1 hereto. </FONT></P>
<P align=center><FONT size=2>[</FONT><FONT size=2><I>Remainder of page
intentionally left blank. Schedule 1 to follow.</I></FONT><FONT size=2>]
</FONT></P>
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<P align=center><FONT size=2><B>Schedule&nbsp;1 </B></FONT></P>
<P align=center><FONT size=2><B>to Assignment and Assumption </B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="76%" border=0>
  <TR vAlign=bottom>
    <TD vAlign=top width="18%"><FONT size=2>Name of Assignor:</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="34%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="45%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="18%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="34%">
      <HR noShade>
    </TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="45%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="18%"><FONT size=2><BR>Name of Assignee:</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=top width="34%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="45%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="18%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="34%">
      <HR noShade>
    </TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="45%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE --><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="76%" border=0>
  <TR vAlign=bottom>
    <TD vAlign=top width="29%"><FONT size=2>Effective Date of
      Assignment:</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="28%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top width="29%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD vAlign=top width="28%">
      <HR noShade>
    </TD>
    <TD vAlign=top width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD vAlign=top colSpan=3><BR>
      <HR noShade>
    </TD>
    <TD vAlign=top width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="40%"><FONT size=2><BR>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE --><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="81%" border=0>
  <TR vAlign=bottom>
    <TH align=left width="60%"><FONT size=1><B>Assigned
      Facility:<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="2%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle colSpan=2><FONT size=1><B>Principal Amount
      Assigned</B></FONT>
      <HR noShade>
    </TH>
    <TH width="2%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="21%"><FONT size=1><B>[Percentage
      Assigned]*</B></FONT>
      <HR noShade>
    </TH>
    <TH width="2%"><FONT size=1>&nbsp;</FONT></TH></TR>
  <TR vAlign=top bgColor=#cceeff>
    <TD width="60%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="2%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="2%"><FONT size=2>$</FONT></TD>
    <TD align=right width="10%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="2%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="21%"><FONT
      size=2>&nbsp;&nbsp;&nbsp;&nbsp;.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD width="2%"><FONT size=2>%</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR align=left width=120 noShade>

<DL compact>
  <DT style="MARGIN-BOTTOM: -11pt"><FONT size=2>*</FONT>
  <DD><FONT size=2>Calculate the Percentage that is assigned to at least 15
  decimal places and show as a percentage of the aggregate commitments of all
  Lenders. </FONT></DD></DL><BR><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>

  <TR vAlign=top>
    <TD colSpan=3><FONT size=2>[Name of Assignor]</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>[Name of Assignee]</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=8,SEQ=77,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=744059,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2>Consented to:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>PG&amp;E CORPORATION</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
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<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
   <TR vAlign=top>
    <TD colSpan=3><FONT size=2>Accepted and Consented to:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>BNP PARIBAS, as Administrative
    Agent</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>Consented to:</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD colSpan=3><FONT size=2><BR>BNP PARIBAS, as Issuing Lender</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=10,SEQ=79,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=156918,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' -->
<P align=right><FONT size=2><B>EXHIBIT G </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF EXEMPTION CERTIFICATE </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is
made to the $200,000,000 Credit Agreement, dated as of December&nbsp;10, 2004,
as amended, supplemented or modified from time to time (the "</FONT><FONT
size=2><I>Credit Agreement</I></FONT><FONT size=2>"), among PG&amp;E
Corporation, a California corporation (the "</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>"), the Lenders parties thereto, BNP
Paribas ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and Deutsche Bank
Securities&nbsp;Inc. ("</FONT><FONT size=2><I>Deutsche</I></FONT><FONT
size=2>"), as joint lead arrangers and joint bookrunners (together and in such
capacities, the "</FONT><FONT size=2><I>Arrangers</I></FONT><FONT size=2>"),
Deutsche, as syndication agent, ABN Amro Bank N.V., Goldman Sachs Credit
Partners L.P. and Union Bank of California, N.A., as documentation agents, and
BNP, as administrative agent (in such capacity, together with any successor
thereto, the "</FONT><FONT size=2><I>Administrative Agent</I></FONT><FONT
size=2>"). Terms defined in the Credit Agreement are used herein as therein
defined. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the
"</FONT><FONT size=2><I>Non-U.S. Lender</I></FONT><FONT size=2>") is providing
this certificate pursuant to Section&nbsp;2.16(d) of the Credit Agreement. The
Non-U.S. Lender hereby represents and warrants that: </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Non-U.S. Lender is the sole record and beneficial owner of the Loans or the
obligations evidenced by Note(s) in respect of which it is providing this
certificate. </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Non-U.S. Lender is not a "bank" for purposes of Section&nbsp;881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended (the "</FONT><FONT
size=2><I>Code</I></FONT><FONT size=2>"). In this regard, the Non-U.S. Lender
further represents and warrants that: </FONT></P>
<UL>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
  Non-U.S. Lender is not subject to regulatory or other legal requirements as a
  bank in any jurisdiction; and </FONT></P>
  <P><FONT
  size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
  Non-U.S. Lender has not been treated as a bank for purposes of any tax,
  securities law or other filing or submission made to any Governmental
  Authority, any application made to a rating agency or qualification for any
  exemption from tax, securities law or other legal requirements; </FONT></P></UL>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Non-U.S. Lender is not a ten percent (10%) shareholder of the Borrower within
the meaning of Section&nbsp;881(c)(3)(B) of the Code; and </FONT></P>
<P><FONT
size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Non-U.S. Lender is not a controlled foreign corporation receiving interest from
a related person within the meaning of Section&nbsp;881(c)(3)(C) of the Code.
</FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
WHEREOF, the undersigned has executed this certificate as of the date set forth
below. </FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
   <TR vAlign=top>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3><FONT size=2>[NAME OF NON-U.S. LENDER]</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2><BR>Date:</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=11,SEQ=80,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=555092,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DW1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:22' --><!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P align=right><FONT size=2><B>EXHIBIT H </B></FONT></P>
<P align=center><FONT size=2><B>FORM OF REVOLVING NOTE </B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS NOTE AND
THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW.
TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED
IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF
SUCH CREDIT AGREEMENT. </FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
    <TR vAlign=top>
    <TD width="49%"><FONT size=2>$</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD align=right width="49%"><FONT size=2>New York, New York<BR>as of
      December&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
      2004</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FOR VALUE
RECEIVED, PG&amp;E CORPORATION, a California corporation (the "</FONT><FONT
size=2><I>Borrower</I></FONT><FONT size=2>"), DOES HEREBY PROMISE TO PAY to the
order of [insert name of Lender] (the "</FONT><FONT
size=2><I>Lender</I></FONT><FONT size=2>") at the office of BNP Paribas, at 787
7<SUP>th</SUP> Avenue, New York, New York 10019, in lawful money of the United
States of America in immediately available funds, the principal amount
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DOLLARS
($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;),
or, if less, the aggregate unpaid principal amount of all Revolving Loans (as
defined in the Credit Agreement referred to below) made by the Lender to the
Borrower pursuant to the Credit Agreement referred to below, whichever is less,
on such date or dates as is required by said Credit Agreement, and to pay
interest on the unpaid principal amount from time to time outstanding hereunder,
in like money, at such office, and at such times and in such amounts as set
forth in Section&nbsp;2.11 of said Credit Agreement. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holder of
this Note is authorized to indorse on the schedules annexed hereto and made a
part hereof or on a continuation thereof which shall be attached hereto and made
a part hereof the date, Type and amount of each Revolving Loan made pursuant to
the Credit Agreement and the date and amount of each payment or prepayment of
principal thereof, each continuation thereof, each conversion of all or a
portion thereof to another Type and, in the case of Eurodollar Loans, the length
of each Interest Period with respect thereto. Each such indorsement shall
constitute </FONT><FONT size=2><I>prima facie</I></FONT><FONT size=2> evidence
of the accuracy of the information indorsed. The failure to make any such
indorsement or any error in any such indorsement shall not affect the
obligations of the Borrower in respect of any Revolving Loan. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Borrower
hereby waives demand, presentment for payment, protest, notice of any kind
(including, but not limited to, notice of dishonor, notice of protest, notice of
intention to accelerate or notice of acceleration), other than notice required
pursuant to the Credit Agreement and diligence in collecting and bringing suit
against any party hereto. The nonexercise by the holder of this Note of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance. </FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Note&nbsp;(a) is one of the promissory notes referred to in the $200,000,000
Credit Agreement, dated as of December&nbsp;10, 2004, as amended, supplemented
or modified from time to time (the "</FONT><FONT size=2><I>Credit
Agreement</I></FONT><FONT size=2>"), among the Borrower, the Lenders parties
thereto, BNP Paribas ("</FONT><FONT size=2><I>BNP</I></FONT><FONT size=2>") and
Deutsche Bank Securities&nbsp;Inc. ("</FONT><FONT
size=2><I>Deutsche</I></FONT><FONT size=2>"), as joint lead arrangers and joint
bookrunners, Deutsche, as syndication agent, ABN Amro Bank N.V., Goldman Sachs
Credit Partners L.P. and Union Bank of California, N.A., as documentation
agents, and BNP, as administrative agent (in such capacity, together with any
successor thereto, the "</FONT><FONT size=2><I>Administrative
Agent</I></FONT><FONT size=2>"), (b)&nbsp;is subject to the provisions of the
Credit Agreement and (c)&nbsp;is subject to optional prepayment in whole or in
part and acceleration of the maturity hereof upon the occurrence of certain
events, all as provided in the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined. </FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=1,SEQ=81,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=554709,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DY1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:23' --><A
name=page_dy1542_1_4></A>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2><B>NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE
CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN
ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 10.6 OF THE
CREDIT AGREEMENT.</B></FONT></P>
<P><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
size=2><B>THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE
LAWS OF THE STATE OF NEW YORK.</B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 width="78%" border=0>
   <TR vAlign=top>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD colSpan=3><FONT size=2>PG&amp;E CORPORATION</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2><BR>By:</FONT></TD>
    <TD width="1%"><FONT size=2><BR>&nbsp;</FONT></TD>
    <TD width="48%"><FONT size=2><BR>&nbsp;</FONT></TD></TR>
  <TR vAlign=top>
    <TD width="44%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="3%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="5%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="1%"><FONT size=2>&nbsp;</FONT></TD>
    <TD width="48%">
      <HR noShade>
      <FONT size=2>Name:<BR>Title:</FONT></TD></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<P align=center><FONT size=2>4</FONT></P>
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=2,SEQ=82,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=629370,FOLIO='4',FILE='DISK033:[04SFO2.04SFO1542]DY1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:23' -->
<P align=right><FONT size=2><B>Schedule&nbsp;A<BR>to Note </B></FONT></P>
<P align=center><FONT size=2><B>LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
</B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 border=0>
   <TR vAlign=bottom>
    <TH align=left width="16%"><FONT size=1><B>Date<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="13%"><FONT size=1><B>Amount of ABR
Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="8%"><FONT size=1><B>Amount Converted to ABR
      Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="16%"><FONT size=1><B>Amount of Principal of Base
      Rate Loans Repaid</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="13%"><FONT size=1><B>Amount of ABR Loans Converted
      to Eurodollar Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="16%"><FONT size=1><B>Unpaid Principal Balance of
      ABR Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="11%"><FONT size=1><B>Notation Made By</B></FONT>
      <HR noShade>
    </TH></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

<P style="PAGE-BREAK-BEFORE: always"></P><!-- ZEQ.=3,SEQ=83,EFW="2148520",CP="PG&E CORPORATION",DN="1",CHK=524192,FOLIO='blank',FILE='DISK033:[04SFO2.04SFO1542]DY1542A.;5',USER='PHENTGE',CD='14-DEC-2004;03:23' -->
<P align=right><FONT size=2><B>Schedule&nbsp;B<BR>to Note </B></FONT></P>
<P align=center><FONT size=2><B>LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS
OF EURODOLLAR LOANS </B></FONT></P><!-- User-specified TAGGED TABLE -->
<TABLE cellSpacing=0 cellPadding=0 border=0>
  <TR vAlign=bottom>
    <TH align=left width="24%"><FONT size=1><B>Amount of Eurodollar
      Loans<BR></B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="12%"><FONT size=1><B>Amount Converted to
      Eurodollar Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="12%"><FONT size=1><B>Interest Period and
      Eurodollar Rate with Respect Thereto</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="14%"><FONT size=1><B>Amount of Principal of
      Eurodollar Loans Repaid</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="13%"><FONT size=1><B>Amount of Eurodollar Loans
      Converted to ABR Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="13%"><FONT size=1><B>Unpaid Principal Balance of
      Eurodollar Loans</B></FONT>
      <HR noShade>
    </TH>
    <TH width="1%"><FONT size=1>&nbsp;</FONT></TH>
    <TH align=middle width="7%"><FONT size=1><B>Notation Made By</B></FONT>
      <HR noShade>
    </TH></TR></TABLE><!-- end of user-specified TAGGED TABLE -->
<HR noShade>

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